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Avery Dennison (AVY) to Report Q1 Earnings: What to Expect?

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Avery Dennison Corporation AVY is scheduled to report first-quarter 2021 results before the opening bell on Apr 28.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter total sales is pegged at $1.92 billion, suggesting an improvement of 11.3% from the prior-year quarter. The consensus mark for the company’s earnings per share stands at $2.01, indicating growth of 21% from the year-ago reported figure. Notably, the estimate has remained unchanged over the past 30 days.

Q4 Performance

In the last reported quarter, Avery Dennison reported year-over-year improvement in both its bottom and top lines. Moreover, earnings and revenues also beat the respective Zacks Consensus Estimate.

Avery Dennison has an impressive earnings surprise history. It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 13.2%.

Avery Dennison Corporation Price and EPS Surprise

Avery Dennison Corporation Price and EPS Surprise
Avery Dennison Corporation Price and EPS Surprise

Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote

Factors to Note

Around 40% of the Avery Dennison’s revenues stem from labelling of non-durable consumer goods like food, beverage, home and personal care products. Demand for these products has been strong amid the pandemic. This is likely to get reflected in the company’s first-quarter sales performance. The company might have also benefited from acquisitions and growth in high-value product categories during the quarter.

The Zacks Consensus Estimate for the Industrial and Healthcare Materials (IHM) segment’s quarterly sales is pegged at $164 million, suggesting year-over-year growth of 11%. The ongoing recovery in the U.S manufacturing sector from the coronavirus pandemic induced slump is likely to have translated into improved order levels for the segment in the quarter to be reported.

The Zacks Consensus Estimate for the Label and Graphic Materials (LGM) segment’s first-quarter sales is currently pegged at $1,317 million, suggesting year-over-year improvement of 12%. The segment’s Label and Packaging Materials business serves essential categories that have been experiencing higher demand amid the coronavirus pandemic. Volume improvement and focus on high-value categories led by specialty labels might have favored the segment’s sales in the quarter under review. However, low demand in the Graphics Solutions business may have negated some these gains.

The Zacks Consensus Estimate for the Retail Branding and Information Solutions segment’s first-quarter sales is pegged at $474 million, suggesting growth of 20% from the prior-year quarter's figure of $395 million. Continued strength in Radio-frequency identification (RFID) including the benefit of the Smartrac acquisition and external embellishments is expected to have boosted the segment’s first-quarter sales. However, weak demand for apparel thanks to widespread retail store and apparel manufacturing closures amid the pandemic might have acted as a dampener.

Avery Dennison has been executing various long-term productivity and temporary cost saving actions during the pandemic. This is likely to have boosted margins and earnings in the quarter under review. Reflecting the impact of savings from these initiatives, the IHM segment’s operating income is expected to improve 21% year over year to $18 million. The Zacks Consensus Estimate for the LGM segment’s operating income stands at $194 million, suggesting year-over-year rise of 13%. The Zacks Consensus Estimate for the RBIS segment’s operating income stands at $53 million, indicating an improvement of 68% from the year-ago reported figure.

Share Price Performance

Avery Dennison’s shares have gained 84.3% in the past year compared with the industry’s growth of 69.2%.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Avery Dennison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat but that is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Avery Dennison has an Earnings ESP of 0.00%.

Zacks Rank: Avery Dennison currently carries a Zacks Rank of 3.

Stocks Poised to Beat Earnings Estimates

Here are some other Industrial Products stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Zebra Technologies Corporation ZBRA, currently a Zacks #2 Ranked stock, has an Earnings ESP of +1.63%. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO Corporation AGCO has an Earnings ESP of +2.94% and a Zacks Rank of 3, currently.

O I Glass, Inc. OI has a Zacks Rank #3 and an Earnings ESP of +2.11%, at present.

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Avery Dennison Corporation (AVY) : Free Stock Analysis Report

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OI Glass, Inc. (OI) : Free Stock Analysis Report

Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report

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