Stock Analysis | Avery Dennison Outlook - A Weak Technical Setup Amid Mixed Analysts and Stronger Fundamentals

Avery Dennison Outlook - A Weak Technical Setup Amid Mixed Analysts and Stronger Fundamentals

Market Snapshot: The technical signal is weak, with 3 bearish and 0 bullish indicators suggesting caution for investors.

News Highlights

Recent news highlights a mix of unrelated but significant developments:

• Oreo’s parent company sues Aldi over packaging claims: Mondelez International has filed a lawsuit against Aldi for alleged packaging infringement of its popular cookies and crackers. This could affect broader packaging stocks like Avery Dennison if consumer awareness and legal trends continue to favor brand protection.
• Advancements in sustainable packaging: EPE USA has announced a stronger focus on developing reusable and recyclable packaging solutions, aligning with growing consumer demands for eco-friendly products. This trend could influence Avery Dennison's market position if it accelerates innovation in the sector.
• Public Employees Retirement System of Ohio cuts its stake in Packaging Co. of America: The Ohio public pension fund reduced its stake by 8.4% in the fourth quarter, possibly signaling a strategic shift or caution in the packaging industry.

Analyst Views & Fundamentals

Average analyst ratings are mixed: the simple average rating is 3.80, while the weighted rating score (based on historical performance) is 2.43. Analysts show some dispersion, with ratings ranging from "Strong Buy" to "Underperform". Notably, none of the five recent analyst ratings align with the current positive price trend (4.44% rise), suggesting market expectations are out of sync with price movements.

Looking at key fundamentals, here are the most relevant factor values and their internal diagnostic scores (0-10):

• Operating revenue YoY growth: -0.41% (score: 3.00)
• Net assets per share growth rate YoY: -2.65% (score: 3.00)
• Total operating revenue YoY growth: -0.41% (score: 3.00)
• Net cash flow from operating activities / Total liabilities: 3.02% (score: 3.00)
• Net cash flow from operating activities / Operating revenue: 4.41% (score: 3.00)
• Equity multiplier: 3.89 (score: 2.00)
• Annualized return on equity: 31.49% (score: 0.00)

While some fundamentals are strong—like ROE—they are offset by weak growth in operating revenue and net assets. The overall fundamental score is a moderate 5.53.

Money-Flow Trends

Big money and retail flows are both showing positive trends. The overall inflow ratio stands at 50.92%, with large and extra-large funds showing inflows above 50% as well. Small investors also participated with a positive trend and a 51.58% inflow ratio. This suggests that both institutional and retail investors are currently bullish, despite the weak technical signals.

Key Technical Signals

The technical outlook for Avery Dennison is clearly bearish. Here are the key signals and their internal diagnostic scores (0-10):

• WR Overbought: Score: 1.00 – indicating a strong bearish bias. Historical signals show a 26.32% win rate and an average return of -1.06% after the signal appears.
• MACD Golden Cross: Score: 1.42 – also bearish, with an average return of -0.87% and a 37.5% win rate.
• Bearish Engulfing: Score: 2.98 – neutral bias but trending downward. Historical win rate is 44.44%.

Recent chart activity includes a Bearish Engulfing pattern on 2025-08-15 and repeated WR Overbought signals from August 12 to 14. According to key insights, the market is in a weak state with clear bearish dominance, and investors are cautioned to pay attention to the risk of a pullback.

Conclusion

While money flows and fundamentals appear to support a neutral-to-bullish stance, the technical outlook is strongly bearish. Investors should consider waiting for a pullback or clearer bullish confirmation before entering. Given the mismatch between analyst ratings and technical signals, the stock remains a high-risk proposition in the near term.