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What's in the Offing for Avery Dennison's (AVY) Q1 Earnings?

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·6 min read
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Avery Dennison Corporation AVY is scheduled to report first-quarter 2022 results before the opening bell on Apr 26.

Q1 Estimates

The Zacks Consensus Estimate for the first-quarter total sales is pegged at $2.30 billion, suggesting an improvement of 12% from the prior-year quarter’s figure. The consensus mark for the company’s earnings per share is pinned at $2.18, indicating a year-over-year decline of 9.2%. The estimate has been unchanged in the past 30 days.

Q4 Performance

In the last reported quarter, Avery Dennison’s bottom line missed the Zacks Consensus Estimate and declined year over year. The top line beat the consensus mark and increased year on year. The company has a trailing four-quarter earnings surprise of 7.6%, on average.

Factors at Play

Avery Dennison is witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products in response to the pandemic. This is likely to get reflected in the company’s first-quarter sales results, as around 40% of its revenues come from these products. Focus on acquisitions and growth in high-value product categories are likely to have contributed to the company’s performance during the March-end quarter.

The Zacks Consensus Estimate for the Label and Graphic Materials segment’s first-quarter sales is currently pegged at $1,505 million, calling for a year-over-year increase of 9.3%. Strong demand for consumer-packaged goods and e-commerce trends are likely to have aided the business during the quarter. Volume improvement, focus on high-value categories led by specialty labels, productivity initiatives and continued margin expansion are anticipated to have buoyed the segment’s sales during the quarter under review. The Zacks Consensus Estimate for the segment’s adjusted operating income is pegged at $194 million, suggesting a year-over-year decline of 14.2%.

The Zacks Consensus Estimate for the Industrial and Healthcare Materials segment’s quarterly sales is pinned at $203 million, indicating an increase from the prior-year quarter’s $192 million. Demand rebound for industrial products and focus on investments are likely to have aided the segment in the quarter to be reported. .

The Zacks Consensus Estimate for the Retail Branding and Information Solutions segment’s January-March quarter sales is pegged at $612 million, calling for an increase of 27% from the prior-year quarter's figure of $483 million. Consistent strength in Radio-frequency identification, strong growth in Intelligent Labels business and high-value categories and robust growth in external embellishments are likely to have boosted the segment’s first-quarter sales. The segment is recording growth in new applications within food and logistics, while the company invests in digital capabilities and solutions. The Zacks Consensus Estimate for the segment’s operating income is pegged at $71 million compared with the prior-year quarter’s $60 million.

Avery Dennison is executing several pricing and re-engineering actions to mitigate inflationary cost pressure. It has also announced additional price increases in most of its businesses worldwide. These are likely to have supported the company’s margins during the quarter in the discussion. Supply-chain-related challenges, unfavorable impacts of foreign currency translation and rising raw material, labor and freight costs might have offset these benefits during the first quarter.

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

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.

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 -3.91%.

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

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Avery Dennison’s shares have lost 14.4% in the past year compared with the industry’s decline of 9.8%.

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Zacks Investment Research


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Stocks Poised to Beat Earnings Estimates

Here are some 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:

Deere & Company DE currently has an Earnings ESP of +0.28% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter fiscal 2022 earnings is currently pegged at $6.68 per share, suggesting 17.6% growth from the year-ago quarter’s tally.

The Zacks Consensus Estimate for quarterly revenues is pinned at $13.5 billion, highlighting year-over-year growth of 22.5%. Deere has a trailing four-quarter earnings surprise of 20.6%, on average. It has a long-term earnings growth of 13.5%.

Illinois Tool Works Inc. ITW currently has an Earnings ESP of +0.46% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2022 earnings has dropped 0.9% in the past 30 days and is currently pegged at $2.05 per share. The projection indicates a 2.8% decline from the prior-year quarter’s tally.

The Zacks Consensus Estimate for Illinois Tool’s quarterly revenues is pegged at $3.7 billion, which indicates a year-over-year improvement of 6.3%. ITW has a trailing four-quarter earnings surprise of 3.7%, on average.

John Bean Technologies Corporation JBT currently has an Earnings ESP of +3.57% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings have been stable in the past 30 days to 56 cents per share, suggesting year-over-year decline of 37.8%.

The Zacks Consensus Estimate for John Bean’s quarterly revenues is pegged at $441 million, which indicates an increase of 5.5% from the prior-year quarter’s levels. It has a trailing four-quarter earnings surprise of 0.93%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report

Deere & Company (DE) : Free Stock Analysis Report

Avery Dennison Corporation (AVY) : Free Stock Analysis Report

John Bean Technologies Corporation (JBT) : Free Stock Analysis Report

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