Avery Dennison (AVY) to Report Q4 Earnings: What's in Store?
Avery Dennison Corporation AVY is scheduled to report fourth-quarter 2023 results before the opening bell on Jan 31.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $2.10 billion, suggesting a growth of 3.4% from the prior-year quarter’s reported figure. The consensus mark for the company’s earnings per share is pinned at $2.15, indicating a year-over-year increase of 30.3%. Earnings estimates have moved up 0.5% in the past 60 days.
Q3 Performance
Avery Dennison’s revenues and earnings declined year over year in the third quarter of 2023. While the top line missed the Zacks Consensus Estimate, the bottom line beat the same. AVY has a trailing four-quarter negative earnings surprise of 5.51%, on average.
Avery Dennison Corporation Price and EPS Surprise
Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote
Factors at Play
Avery Dennison has been witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products. However, apparel inventory reductions have been widespread across all segments, which led to a decline in volumes. Retailers and brands are expected to have run through some of their excess inventory in the fourth quarter. We thus expect volumes to pick up slightly in the fourth quarter compared with the third quarter’s levels.
Supply constraints and elevated raw material, labor and freight costs are expected to have impacted margins in the quarter under review. Avery Dennison has been executing several pricing and re-engineering actions to mitigate inflationary cost pressure.
Segment Expectations
Our model predicts Materials Group’s organic sales to be up 1.2% year over year in the quarter. We expect the segment’s fourth quarter 2023 revenues to be up 3.4% year over year to $1,490.7 million. Our prediction for the segment’s adjusted operating profit is pinned at $215.9 million, indicating a year-over-year improvement of 44%.
We expect the Solutions Group segment’s organic sales to be up 0.9% year over year in the fourth quarter. Our model predicts the segment’s sales at $604.6 million, suggesting an increase of 3.4% from the prior year’s actual. The same for the segment’s operating profit, which is pinned at $59.9 million, indicating an increase of 12.8% from the year-ago quarter’s reported figure.
What the Zacks Model Indicates
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.
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Earnings ESP: Avery Dennison has an Earnings ESP of -1.68%.
Zacks Rank: Avery Dennison currently carries a Zacks Rank of 3.
Price Performance
Avery Dennison’s shares have gained 5.5% in the past year compared with the industry’s growth of 12%.
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Stocks to Consider
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
Graco GGG, expected to release earnings on Jan 29, has an Earnings ESP of +4.87% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GGG’s earnings for the fourth quarter is pegged at 79 cents per share. The consensus estimate for the quarterly earnings has remained unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 7.2%.
Eaton Corporation ETN, scheduled to release earnings on Jan 30, has an Earnings ESP of +3.80% and sports a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for ETN’s fourth-quarter earnings is pegged at 95 cents per share. Earnings estimates have moved up 2% in the past 60 days. It has an average trailing four-quarter earnings surprise of 14%.
Caterpillar CAT, scheduled to release earnings on Feb 5, has an Earnings ESP of +2.02%. CAT currently carries a Zacks Rank of 3.
The consensus estimate for CAT’s earnings for the fourth quarter is pegged at $4.76 per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 16.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Caterpillar Inc. (CAT) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Avery Dennison Corporation (AVY) : Free Stock Analysis Report
Graco Inc. (GGG) : Free Stock Analysis Report
