📊 AVY Key Takeaways
Is Avery Dennison Corp (AVY) a Good Investment?
Avery Dennison demonstrates stable cash generation and manageable debt service, but faces headwinds from declining profitability (-2.4% YoY net income) despite modest revenue growth of 1.1%. Weak returns on equity (7.3%) and assets (1.9%) suggest limited earnings power, while elevated leverage (1.38x D/E) constrains financial flexibility in a low-growth mature business.
Avery Dennison shows solid fundamental quality through healthy margins, strong free cash flow generation, and excellent interest coverage, indicating a durable and profitable operating model. Growth is modest and recent net income softened slightly, but the business still converts revenue into cash efficiently while sustaining strong returns on equity. The main fundamental constraint is balance sheet leverage and only adequate liquidity, which makes execution and cash discipline important.
Avery Dennison Corp Key Strengths (AVY)
- Positive free cash flow of $108.2M demonstrates operational cash generation capability
- Strong interest coverage ratio of 8.4x indicates robust debt servicing ability
- Established $2.3B revenue base in converted paper products with consistent market position
- Strong profitability profile with 28.8% gross margin, 10.4% operating margin, and 7.8% net margin
- Robust cash generation with $881.4M operating cash flow and $712.4M free cash flow
- High earnings resilience shown by 32.3x interest coverage and 30.7% ROE
AVY Stock Risks: Avery Dennison Corp Investment Risks
- Net income declined 2.4% YoY despite flat revenue growth, signaling margin compression and operational efficiency concerns
- Very weak return metrics (ROE 7.3%, ROA 1.9%) indicate poor capital allocation and limited earnings power relative to asset base
- Elevated leverage of 1.38x debt-to-equity combined with tight quick ratio of 0.80x creates liquidity pressure and limits financial flexibility
- Revenue growth is low at 1.1% YoY, which may limit operating leverage and earnings expansion
- Net income declined 2.4% YoY, suggesting some pressure on bottom-line growth quality
- Leverage is meaningful with 1.43x debt/equity and liquidity is only moderate with a 1.13x current ratio and 0.76x quick ratio
Key Metrics to Watch
- Operating margin trend and gross margin sustainability amid inflationary pressures
- Free cash flow generation and debt reduction trajectory given $3.2B long-term debt burden
- Return on equity improvement pathway given current 7.3% return is below cost of capital expectations
- Free cash flow margin and operating cash flow conversion
- Debt reduction progress and liquidity ratios
Avery Dennison Corp (AVY) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 4.7% FCF margin may limit capital allocation flexibility.
AVY Profit Margin, ROE & Profitability Analysis
AVY vs Materials Sector: How Avery Dennison Corp Compares
How Avery Dennison Corp compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Avery Dennison Corp Stock Overvalued? AVY Valuation Analysis 2026
Based on fundamental analysis, Avery Dennison Corp shows some fundamental concerns relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Avery Dennison Corp Balance Sheet: AVY Debt, Cash & Liquidity
AVY Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Avery Dennison Corp's revenue has shown modest growth of 5% over the 5-year period. The most recent EPS of $6.20 reflects profitable operations.
AVY Revenue Growth, EPS Growth & YoY Performance
AVY Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.1B | $166.3M | $2.09 |
| Q3 2025 | $2.2B | $166.3M | $2.13 |
| Q2 2025 | $2.2B | $176.8M | $2.18 |
| Q1 2025 | $2.1B | $166.3M | $2.09 |
| Q3 2024 | $2.1B | $138.3M | $1.71 |
| Q2 2024 | $2.1B | $100.4M | $1.24 |
| Q1 2024 | $2.1B | $121.2M | $1.49 |
| Q3 2023 | $2.1B | $138.3M | $1.71 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Avery Dennison Corp Dividends, Buybacks & Capital Allocation
AVY SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Avery Dennison Corp (CIK: 0000008818)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AVY
What is the AI rating for AVY?
Avery Dennison Corp (AVY) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 71% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AVY's key strengths?
Claude: Positive free cash flow of $108.2M demonstrates operational cash generation capability. Strong interest coverage ratio of 8.4x indicates robust debt servicing ability. ChatGPT: Strong profitability profile with 28.8% gross margin, 10.4% operating margin, and 7.8% net margin. Robust cash generation with $881.4M operating cash flow and $712.4M free cash flow.
What are the risks of investing in AVY?
Claude: Net income declined 2.4% YoY despite flat revenue growth, signaling margin compression and operational efficiency concerns. Very weak return metrics (ROE 7.3%, ROA 1.9%) indicate poor capital allocation and limited earnings power relative to asset base. ChatGPT: Revenue growth is low at 1.1% YoY, which may limit operating leverage and earnings expansion. Net income declined 2.4% YoY, suggesting some pressure on bottom-line growth quality.
What is AVY's revenue and growth?
Avery Dennison Corp reported revenue of $2.3B.
Does AVY pay dividends?
Avery Dennison Corp pays dividends, with $72.3M distributed to shareholders in the trailing twelve months.
Where can I find AVY SEC filings?
Official SEC filings for Avery Dennison Corp (CIK: 0000008818) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AVY's EPS?
Avery Dennison Corp has a diluted EPS of $2.18.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AVY's fundamental grade?
Based on our AI fundamental analysis in June 2026, Avery Dennison Corp has a A grade with 71% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AVY stock overvalued or undervalued?
Valuation metrics for AVY: ROE of 7.3% (sector avg: 14%), net margin of 7.3% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is AVY's AI grade for 2026?
Our dual AI analysis gives Avery Dennison Corp a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is AVY's free cash flow?
Avery Dennison Corp's operating cash flow is $136.5M, with capital expenditures of $28.3M. FCF margin is 4.7%.
How does AVY compare to other Materials stocks?
Vs Materials sector averages: Net margin 7.3% (avg: 10%), ROE 7.3% (avg: 14%), current ratio 1.15 (avg: 1.6).