Stifel highlights margin enlargement potential for Avery Dennison inventory

Jul 9, 2024 | blog

On Tuesday, Stifel, a monetary companies firm, initiated protection on Avery Dennison Corporation (NYSE:) inventory, a worldwide chief in self-adhesive and clever (RFID) labels, with a Buy ranking and a worth goal of $274.60. The agency highlighted the corporate’s main market place and its potential for progress following a difficult 2023 marked by vital destocking.

Avery Dennison’s near-term prospects look promising as the corporate is predicted to see normalization in self-adhesive label volumes and structural progress in its clever labels section.

These components are anticipated to contribute to the corporate’s top-line progress in 2024. Stifel predicts that Avery Dennison will profit from improved working leverage and probably decrease enter prices, which ought to assist in margin enlargement.

The monetary companies agency additionally identified that, regardless of the difficulties confronted within the earlier 12 months, Avery Dennison is poised for a strong restoration in 2024. This rebound is predicted to maintain the corporate on monitor to fulfill its long-term aims for 2025.

Avery Dennison’s inventory ranking improve comes at a time when the corporate is navigating by the aftermath of a tricky market surroundings. Stifel’s constructive outlook suggests confidence within the firm’s capacity to beat these challenges and capitalize on the expansion alternatives inside the labeling trade.

In different latest information, Avery Dennison Corporation has secured a $1.2 billion credit score facility with an choice to extend the quantity by $600 million upon assembly sure circumstances.

The credit score settlement matures on June 26, 2029, with provisions permitting for potential one-year extensions. In monetary developments, the corporate reported vital progress in earnings for the primary quarter, with a notable improve in comparison with the earlier 12 months. Furthermore, Avery Dennison declared a 9% improve in its quarterly dividend, reflecting its monetary well being.

The firm has additionally made strategic modifications to its management, appointing Ward Dickson, former Executive Vice President and Chief Financial Officer at WestRock (NYSE:) Company, to its Board of Directors. This transfer is predicted to strengthen the corporate’s monetary management.

In analyst information, Baird has raised its worth goal on Avery Dennison from $230 to $250, sustaining an Outperform ranking. Similarly, Argus has elevated Avery Dennison’s inventory worth goal from $240.00 to $245.00, sustaining a Buy ranking.

These changes mirror the analysts’ confidence in Avery Dennison’s progress prospects, significantly its anticipated progress pushed by Radio-Frequency Identification (RFID) expertise.

InvestingPro Insights

With Avery Dennison Corporation (NYSE:AVY) receiving a constructive outlook from Stifel, let’s dive into some key metrics and insights from InvestingPro that might present further context for buyers. Avery Dennison boasts a strong market capitalization of $17.33 billion and a P/E ratio standing at a premium degree of 31.23, reflecting the corporate’s robust market place as famous by Stifel. In phrases of efficiency, whereas the corporate has skilled a slight income contraction of three.48% over the past twelve months as of Q1 2024, it has managed to keep up a wholesome gross revenue margin of 28.01%, which helps the potential for margin enlargement transferring ahead.

Investors may additionally pay attention to the corporate’s dividend monitor document, which features a outstanding historical past of sustaining dividend funds for 54 consecutive years and elevating them for the final 13 years. These components, mixed with a dividend yield of 1.64%, may very well be interesting for income-focused buyers. On the flip facet, InvestingPro Tips recommend warning as analysts have revised their earnings expectations downwards for the upcoming interval, and the corporate is buying and selling at a excessive Price/Book a number of of seven.86.

For these eager about a deeper evaluation, InvestingPro gives further suggestions for Avery Dennison, which may be accessed at To improve your investing expertise, use the coupon code PRONEWS24 to stand up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With a number of extra suggestions accessible on InvestingPro, buyers can acquire a complete understanding of Avery Dennison’s monetary well being and future prospects.

This article was generated with the assist of AI and reviewed by an editor. For extra info see our T&C.

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