Stock Analysis | Avery Dennison Outlook - A Stock Facing Technical Weakness Despite Strong Fundamentals

1. Market Snapshot

Headline: Avery Dennison (AVY) is showing signs of bearish pressure, with technical indicators suggesting a weak market outlook and a suggestion to avoid the stock at this time.

2. News Highlights

A recent wave of packaging industry news could indirectly impact Avery Dennison. For example:

• Oreo maker sues Aldi over packaging – Mondelez International, parent company of Oreo, has taken legal action against Aldi for allegedly copying its packaging. Such legal battles may raise awareness of the importance of brand differentiation in the packaging and labeling sector, where Avery Dennison operates.
• EPE USA advances sustainable packaging – Another packaging player, EPE USA, announced new initiatives to develop reusable and recyclable packaging materials. This highlights a growing industry trend toward sustainability, which could benefit Avery Dennison if it continues to innovate in eco-friendly labeling solutions.

3. Analyst Views & Fundamentals

Analysts have been mixed in their outlook on Avery Dennison. Here's a breakdown of the recent consensus:

• Average rating score (simple mean): 3.80
• Weighted rating score (performance-weighted): 2.43
• Rating consistency: The ratings are dispersed, with no clear consensus. The recent 20-day ratings included two "Buy", one "Strong Buy", and two "Neutral" ratings.
• Price trend alignment: The current price trend is down (-0.35%), which aligns with the slightly bearish market expectations.

Key fundamental values and their internal diagnostic scores (0-10):

• PE (Price-to-Earnings): 82.62 (Score: 1.57)
• PS (Price-to-Sales): 7.03 (Score: 0.56)
• NPM (Net Profit Margin): 8.51% (Score: 2.25)
• Net Income/Revenue: -17.79% (Score: 1.26)
• Gross Profit Margin: 28.85% (Score: 0.51)
• Operating Cycle: 121.77 (Score: 0.00)
• Net Cash Flow from Operating Activities (YoY): -39.37% (Score: 1.03)
• Equity Ratio (Total liabilities / Shareholders’ equity): 289.18% (Score: 1.95)
• Shareholders’ equity / Total liabilities: 34.58% (Score: 0.34)
• Equity Multiplier: 3.89 (Score: 2.03)

4. Money-Flow Trends

Big-money and retail investors are showing slightly different behaviors in Avery Dennison stock:

• Overall money flow trend: Positive (score: 7.64, rated as good)
• Big money inflow ratio: 50.54% – Suggesting some institutional or large investors are buying in.
• Retail (small) inflow ratio: 51.34% – Retail investors are also showing interest.
• Large and extra-large investors: While large investors are inflow positive (50.80%), extra-large investors are in outflow (48.85%), indicating some uncertainty at the top end of the market.

5. Key Technical Signals

Technically, Avery Dennison is under pressure with four bearish indicators and no bullish ones, suggesting a weak trend:

• WR Overbought (Internal diagnostic score: 1.00) – Indicates strong bearish potential.
• Marubozu White (Score: 3.27) – A sign of strong selling pressure after an apparent bullish move.
• Bearish Engulfing (Score: 2.27) – A classic reversal pattern signaling a downward trend.

Recent chart patterns (by date):

• 2025-08-22: WR Overbought, Marubozu White
• 2025-08-28: WR Oversold, MACD Death Cross, Bearish Engulfing
• 2025-08-29: WR Oversold

Key Insight: The market is currently in a volatile phase with unclear direction. Bearish indicators dominate the technical landscape (4 bearish vs. 0 bullish).

6. Conclusion

Avery Dennison is facing a challenging technical environment with weak indicators and mixed analyst ratings. While its fundamentals still show some strength in areas like profitability and equity ratios, the recent bearish momentum may keep the stock on the defensive side for now. Investors should consider waiting for a clearer trend or a potential pullback before making a move, especially with the technical score at a low 3.27 (on a 0-10 scale).