Avery Dennison Price Target Cut By ~3% Accounting For Inflation headwinds

• Raymond James analyst Joshua Wilson lowered the price target on Avery Dennison Corp (NYSE: AVY) to $195 (an upside of 12.5%) from $200 while maintaining the Outperform rating on the shares.

• Ahead of calendar 2Q results, Wilson trimmed his estimates modestly for each covered name to account for FX mark-to-market.

• The analyst increased inflation headwinds where appropriate. The notable exception to this dynamic was polypropylene prices, which have fallen 10-15% since May.

• Wilson expects the continued outsized growth in intelligent labels to drive sales growth and EBITDA margin expansion, with the latter suggesting the stock has room to outperform further from here, given the shares’ relative performance’s historical relationship to EBITDA expectations.

• The analyst says his enthusiasm is partially tempered by a relatively low forward FCF yield (~6%), combined with what appears to be reasonable market-implied LT sales growth assumptions.

• Price Action: AVY shares closed lower by 0.27% at $174.83 on Monday.

Latest Ratings for AVY

Date	Firm	Action	From	To
Feb 2022	Raymond James	Maintains		Outperform
Jan 2022	UBS	Maintains		Neutral
Nov 2021	Raymond James	Initiates Coverage On		Outperform

View More Analyst Ratings for AVY

View the Latest Analyst Ratings

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