The yearly results for Avery Dennison Corporation (NYSE:AVY) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$7.1b were in line with what analysts predicted, Avery Dennison surprised by delivering a statutory profit of US$3.57 per share, a notable 11% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Avery Dennison after the latest results.
Taking into account the latest results, the current consensus from Avery Dennison's twelve analysts is for revenues of US$7.34b in 2020, which would reflect a modest 3.8% increase on its sales over the past 12 months. Statutory earnings per share are expected to soar 94% to US$6.93. Before this earnings report, analysts had been forecasting revenues of US$7.28b and earnings per share (EPS) of US$6.87 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$135. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Avery Dennison at US$156 per share, while the most bearish prices it at US$90.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Next year brings more of the same, according to analysts, with revenue forecast to grow 3.8%, in line with its 4.0% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 2.7% next year. So it's pretty clear that Avery Dennison is forecast to grow substantially faster than its market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Avery Dennison's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Avery Dennison analysts - going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Avery Dennison's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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