Avery Dennison Price Target Cut By ~3% Accounting For Inflation headwinds

  • Raymond James analyst Joshua Wilson lowered the price target on Avery Dennison Corp AVY to $195 (an upside of 12.5%) from $200 while maintaining the Outperform rating on the shares.
  • Ahead of calendar 2Q results, Wilson trimmed his estimates modestly for each covered name to account for FX mark-to-market.
  • The analyst increased inflation headwinds where appropriate. The notable exception to this dynamic was polypropylene prices, which have fallen 10-15% since May.
  • Wilson expects the continued outsized growth in intelligent labels to drive sales growth and EBITDA margin expansion, with the latter suggesting the stock has room to outperform further from here, given the shares’ relative performance’s historical relationship to EBITDA expectations.
  • The analyst says his enthusiasm is partially tempered by a relatively low forward FCF yield (~6%), combined with what appears to be reasonable market-implied LT sales growth assumptions.
  • Price Action: AVY shares closed lower by 0.27% at $174.83 on Monday.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsPrice TargetAnalyst RatingsBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!