AVY

Materials

Avery Dennison

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2010	FY 2011	FY 2011	FY 2012	FY 2013	FY 2015	FY 2016	FY 2016	FY 2017	FY 2018	FY 2019	FY 2021	FY 2022	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$6.7B	$6.0B	$6.5B	$6.0B	$6.0B	$6.1B	$6.3B	$6.0B	$6.1B	$6.6B	$7.2B	$7.1B	$7.0B	$8.4B	$9.0B	$8.4B	$8.8B	$8.9B	+1.1%
Gross Profit	$1.7B	$1.6B	$1.8B	$1.5B	$1.6B	$1.6B	$1.7B	$1.6B	$1.7B	$1.8B	$1.9B	$1.9B	$1.9B	$2.3B	$2.4B	$2.3B	$2.5B	$2.5B	+0.6%
Gross Margin	25.7%	26.7%	28.0%	25.2%	26.1%	26.7%	26.1%	27.6%	27.9%	27.4%	26.8%	26.9%	27.6%	27.5%	26.6%	27.2%	28.9%	28.8%	-0.1pp
Net Income	$266.1M	-$746.7M	$316.9M	$190.1M	$215.4M	$215.8M	$248.9M	$274.3M	$320.7M	$281.8M	$467.4M	$303.6M	$555.9M	$740.1M	$757.1M	$503.0M	$704.9M	$688.0M	-2.4%
Net Margin	4.0%	-12.5%	4.9%	3.2%	3.6%	3.5%	3.9%	4.6%	5.3%	4.3%	6.5%	4.3%	8.0%	8.8%	8.4%	6.0%	8.1%	7.8%	-0.3pp
Free Cash Flow	$421.3M	$499.3M	$403.2M	$317.7M	$418.4M	$190.9M	$226.3M	$337.9M	$408.4M	$459.6M	$231.2M	$527.1M	$549.9M	$791.8M	$682.9M	$560.7M	$730.0M	$712.4M	-2.4%
FCF Margin	6.3%	8.4%	6.2%	5.3%	6.9%	3.1%	3.6%	5.7%	6.7%	6.9%	3.2%	7.5%	7.9%	9.4%	7.6%	6.7%	8.3%	8.0%	-0.3pp
EPS (Diluted)	$2.70	$-7.21	$2.97	$1.78	$2.08	$2.16	$2.60	$2.95	$3.54	$3.13	$5.28	$3.57	$6.61	$8.83	$9.21	$6.20	$8.73	$8.79	+0.7%

Total Debt$3.2B

Cash & Equiv.$202.8M

Net Debt$3.0B

3 min read

1. THE BIG PICTURE

Avery Dennison is in the midst of a structural transformation, decoupling its financial performance from the slow-growth materials sector by embedding digital intelligence into physical products. While its legacy Materials Group is navigating deflationary pricing and organic sales declines, Avery Dennison is leveraging its global scale to dominate the "high-value" categories—specifically RFID and intelligent labels—which now provide the margin cushion necessary to sustain its sector-leading cash flow.

2. WHERE THE RISKS HIT HARDEST

Avery Dennison’s "size and scale," which management cites as a primary competitive advantage (10-K Item 1), is simultaneously a point of significant vulnerability because 69% of net sales originate outside the U.S. (Risks). This international exposure directly threatens its "technical expertise" advantage; for instance, Avery Dennison must constantly engage in "material re-engineering" to protect its 28.8% gross margin from volatile raw material and energy costs that are subject to inflationary pressures (10-K Item 1). Furthermore, the push into digital identification increases exposure to global sustainability regulations, such as the EU’s Corporate Sustainability Reporting Directive, which could increase compliance costs and force expensive product redesigns.

3. WHAT THE NUMBERS SAY TOGETHER

Avery Dennison is the most efficient cash generator among its peers, leading the group with a 7.2% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (Peer Benchmarking). However, recent results show a tension between volume and profit: while fourth-quarter sales grew 3.9%, reported earnings per share fell to $2.15 from $2.26 (8-K). This divergence is explained by the Materials Group, where a 0.9% organic sales decline was driven by deflation-related price reductions that offset low single-digit volume growth. Avery Dennison’s growth trajectory is currently bifurcated; while "base" solutions are declining at a mid-single-digit rate, high-value segments like Vestcom are growing by more than 10% (8-K). This shift toward higher-margin digital solutions is the primary driver of Avery Dennison's 12.7% operating margin, which ranks second in its peer group (Peer Benchmarking).

4. IS IT WORTH IT AT THIS PRICE?

At 15.4x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Avery Dennison is trading in line with the peer median (Peer Benchmarking). According to the provided valuation context, the market is pricing in approximately 3.3% long-term growth. This valuation appears at fair value given Avery Dennison's actual growth trajectory; while TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth is a modest 1.1%, the implied EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth of 7.2% is supported by a 3.9% buyback yield—the highest in the peer group (Peer Benchmarking). If growth were to slow to a GDP-pace of 2.5%, the justified multiple would fall to 13.6x, suggesting roughly 12% downside (CAPM analysis). The current price is essentially a bet that the double-digit growth in intelligent labels can continue to subsidize the stagnation in the broader materials portfolio.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if high-value categories exceed 50% of total revenue, confirming that the digital transition has reached a scale where it can drive the entire company's growth regardless of base material cycles.
Cautious if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin drops below 7%, as the current valuation relies heavily on the 3.9% buyback yield to meet the market's implied EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth targets.
Cautious if organic sales in the Materials Group decline for three consecutive quarters, suggesting that deflationary pricing is outrunning Avery Dennison's productivity gains.

6. BOTTOM LINE

Structural Advantage: A dominant global scale in materials science integrated with proprietary RFID technology that creates significant technical and capital barriers to entry. Bottom Line: Avery Dennison is a high-quality cash compounder trading at a fair price, though its growth is currently tethered to a volatile global trade environment.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

International Operations: With 69% of net sales originating outside the U.S. in 2025, Avery Dennison is highly exposed to geopolitical, social, and economic instability, including trade policy changes and tariffs that have previously resulted in softer consumer volumes.
Foreign Currency Exposure: Because the majority of net sales are denominated in foreign currencies, Avery Dennison faces risks to its gross margins and net sales from exchange rate volatility, such as the unfavorable impacts seen with the Indian rupee and Brazilian real in 2025.
Raw Material and Energy Costs: As a manufacturer, Avery Dennison’s profitability depends on controlling costs for raw materials and energy, which are subject to significant price fluctuations and inflationary pressures.
Competitive and Market Dynamics: Avery Dennison faces the risk of losing market share or being forced to reduce selling prices if it fails to compete effectively against existing or new competitors, including its own customers, distributors, and suppliers, in high-value categories.
Sustainability and Climate Regulation: Increasing global regulations regarding plastic packaging, recyclability, and greenhouse gas (GHG) emissions—such as the EU’s Corporate Sustainability Reporting Directive—threaten to increase compliance costs and potentially reduce demand for certain products.

2. Company-Specific Risks

Acquisition Integration: Avery Dennison’s strategy relies on acquisitions, such as the $390 million purchase of Taylor Adhesives in 2025, which carries risks related to the successful integration of systems, personnel, and the realization of projected performance targets.
Customer Consolidation: While no single customer represented 10% or more of net sales in 2025, the consolidation of converter customers and the vertical integration of some of Avery Dennison’s largest customers could increase pricing pressure.
Information Technology Infrastructure: Avery Dennison relies on a complex global IT infrastructure that is susceptible to cybersecurity events, including ransomware and AI-leveraged attacks, which could disrupt operations and lead to significant remediation costs.
Pension Liability Volatility: Avery Dennison maintains significant pension assets ($733 million) and liabilities ($721 million) as of December 31, 2025, which are subject to market and interest rate risks that could increase the net pension liability.

3. Regulatory/Legal Risks

Tariff Policy: The U.S. implementation of a 10% global baseline tariff and reciprocal tariffs from other regions creates trade policy instability, which Avery Dennison estimates caused a low single-digit percentage decrease in sales in its apparel categories during the second, third, and fourth quarters of 2025.
Environmental Compliance: Avery Dennison is designated as a potentially responsible party for the environmental clean-up of ten sites as of year-end 2025, and the actual expense to remediate these sites could exceed current accrued liabilities.
Anti-Corruption Laws: Failure to comply with the U.S. Foreign Corrupt Practices Act or the UK’s Bribery Act of 2010 could result in substantial civil and criminal penalties, including fines and incarceration for responsible employees.
Intellectual Property Litigation: Avery Dennison is involved in patent litigation, such as the settled 2024 matter with ADASA Inc., and faces the risk of future claims that could require the payment of damages or the cessation of sales for certain products.

4. Financial Impact Map

International Operations → Net Sales → 69% of net sales originated outside the U.S. in 2025. Foreign Currency Exposure → Gross Margins → Unfavorable exchange rate movements can lower gross margins and require impairments of goodwill and other intangible assets. Raw Material and Energy Costs → Profitability → Inflationary headwinds require targeted price increases or product re-engineering to maintain margins. Acquisitions → Debt and Amortization Expenses → Future acquisitions could result in increased debt, interest expense, and amortization expenses related to intangible assets. Pension Liabilities → Earnings and Cash Flows → Declines in the value of pension assets or increases in liability values due to interest rate volatility could materially adversely affect earnings and cash flows.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025
14A	Mar 2025	—