Stock Analysis | Avery Dennison Outlook - Mixed Signals for AVY: Technical Weakness Contrasted by Strong Fund Flows

Market Snapshot

Takeaway: Avery Dennison (AVY) is seeing conflicting signals—weak technical analysis and a strong rise in price, but robust inflows from institutional money. Investors should stay cautious due to the technical red flags, despite strong capital inflows.

News Highlights

• Oreo maker sues Aldi over packaging: Mondelez International has filed a lawsuit against Aldi over alleged copycat cookie packaging, which may shift attention to the broader packaging sector, potentially affecting Avery Dennison as a key player in labeling and packaging solutions.
• EPE USA advances sustainable packaging: EPE USA’s initiatives in reusable and recyclable packaging solutions reflect growing industry demand for eco-friendly options. This trend could indirectly benefit Avery Dennison, which also offers sustainable label and packaging solutions.
• Indian state introduces deposit refund scheme for non-biodegradable packaging: Himachal Pradesh's policy to reduce mountain trash by offering refunds for returned packaging could increase demand for sustainable solutions globally, influencing packaging companies like Avery Dennison.

Analyst Views & Fundamentals

Avery Dennison currently holds a simple average rating of 3.80 and a performance-weighted rating of 2.43, indicating a mixed bag of analyst sentiment. The ratings are inconsistent—some analysts rate the stock as "Strong Buy," while others suggest caution or neutrality.

This divergence does not align well with the recent 4.58% price rise, which is at odds with the generally cautious or neutral expectations of the market. Analysts from BMO Capital, Citigroup, JP Morgan, and others have issued mixed ratings, with some historical records showing underperformance or very modest returns.

Key fundamental factors include:

• Shareholders’ equity attributable to parent company / Total liabilities: 34.58% (internal diagnostic score: 3.00)
• Net cash flow from operating activities / Operating revenue: 4.4062% (internal diagnostic score: 3.00)
• PE ratio: 82.62 (internal diagnostic score: 1.00)
• PS ratio: 7.03 (internal diagnostic score: 0.00)
• Profit-MV ratio: -7.75% (internal diagnostic score: 0.00)
• Net income to revenue: -17.90% (internal diagnostic score: 2.00)
• Operating revenue YoY growth: -40.58% (internal diagnostic score: 3.00)

The overall fundamental score stands at 4.46, indicating decent fundamentals with some caveats—particularly around profitability and growth metrics. The company’s high PE and low net income-to-revenue ratio are red flags for long-term investors.

Money-Flow Trends

Big money is flowing into Avery Dennison, with positive inflow ratios across all categories. The overall trend shows a positive inflow ratio of 50.98%, and the block (institutional) inflow ratio is 51.07%, suggesting strong institutional support.

Small and retail investors are also showing interest, with a small inflow ratio of 51.62%. Large, extra-large, and medium inflow ratios are all above 50%, indicating a coordinated buying interest across all sizes of investors.

These positive flows suggest that while the technical indicators are weak, the market is still showing confidence in the stock. However, the discrepancy between technical and flow signals indicates a need for caution.

Key Technical Signals

Avery Dennison’s technical outlook is currently weak. The technical score stands at 2.15, an internal diagnostic score (0-10), with 3 bearish indicators and 0 bullish ones. This suggests a high risk of a price correction.

Key signals include:

• WR Overbought: Internal diagnostic score of 1.00—strong bearish bias.
• MACD Golden Cross: Internal diagnostic score of 2.48—neutral bias.
• Bearish Engulfing: Internal diagnostic score of 2.98—neutral bias.

Recent chart patterns include:

• 2025-08-13: WR Overbought
• 2025-08-12: WR Overbought, MACD Golden Cross
• 2025-08-15: Bearish Engulfing
• 2025-08-14: WR Overbought

These patterns suggest a weakening trend with bearish momentum. The key insights from the technical analysis reinforce this—three bearish signals versus none bullish, and a suggestion to avoid the stock in its current condition.

Conclusion

While Avery Dennison shows strong institutional and retail inflows and decent fundamentals, the technical indicators are deeply bearish. The price has risen 4.58% in the last 5 days, but this appears to be at odds with the weak technical profile.

Actionable takeaway: Consider waiting for a pull-back or clearer signals before committing capital to Avery Dennison. Monitor technical indicators and the performance of its key peers in the packaging sector. Analyst and institutional confidence remains mixed, so proceed with caution.