Is ACCO Brands (NYSE:ACCO) a Buy Amid Mixed Earnings and Dividend Sustainability?

In the volatile landscape of consumer goods, ACCO Brands (NYSE:ACCO) presents a compelling case study of short-term technical optimism clashing with long-term fundamental uncertainties. The company’s recent earnings report and technical indicators paint a mixed picture, leaving investors to weigh immediate momentum against structural risks.

Short-Term Technical Momentum: A Bullish Facade

ACCO’s stock has shown signs of short-term resilience, with technical indicators suggesting a potential rebound. The 14-day RSI of 40.821 indicates an oversold condition, historically signaling a possible reversal [1]. Additionally, the 5-day moving average (3.664) sits above the 50-day and 200-day averages, creating a “golden cross” that some traders interpret as a buy signal [1]. However, the MACD of -0.043 and bearish 50-day/200-day crossovers counterbalance this optimism, suggesting lingering downward pressure [2].

Despite these mixed signals, ACCO’s stock rose 0.248% in the last trading session, buoyed by its ability to exceed revenue expectations in Q2 2025 ($395 million vs. $389.8 million forecast) [1]. Analysts at Barrington Research have even assigned an “Outperform” rating with a $6.00 price target, citing the company’s cost-cutting initiatives and free cash flow projections [3].

Long-Term Fundamental Risks: A Fragile Foundation

While technicals hint at near-term stability, ACCO’s fundamentals tell a different story. Q2 2025 net sales fell 9.9% year-over-year to $395 million, driven by tariffs and soft global demand, despite a 12% surge in gaming accessories sales [1]. The Americas segment, which accounts for a significant portion of revenue, saw a 15% decline, underscoring regional vulnerabilities [2].

The company’s dividend sustainability, a key draw for income-focused investors, also raises red flags. While the current payout ratio of 61% appears manageable [4], analysts project it could balloon to 106% within a year if earnings growth (estimated at 125.3%) fails to materialize [1]. This would render the 7.43% yield unsustainable, risking a dividend cut—a scenario that could trigger a sharp sell-off.

Moreover, ACCO’s five-year EPS decline of 63% annually highlights structural challenges in its core markets [3]. Even with $40 million in cost savings from its multi-year program, operating income dropped 27.1% to $47.1 million in Q2 2025, reflecting margin compression [2]. Management’s guidance for a 7–8.5% sales decline in 2025 further underscores the fragility of its recovery [1].

Contrasting Momentum and Fundamentals: A Delicate Balance

The tension between ACCO’s technical allure and fundamental fragility is emblematic of its broader strategic challenges. Short-term traders may capitalize on the oversold RSI and bullish moving averages, but these signals ignore the company’s deteriorating sales trends and dividend risks. Conversely, long-term investors must grapple with the reality that ACCO’s cost-cutting measures, while helpful in the near term, do not address underlying demand weakness or geopolitical headwinds like tariffs.

Analysts remain divided. While some highlight a “strong sell” signal from technical indicators [2], others point to ACCO’s institutional ownership and 20% earnings growth forecast as positives [2]. This divergence reflects the stock’s inherent volatility and the difficulty of predicting its trajectory in a high-risk sector.

Conclusion: Proceed with Caution

ACCO Brands offers a paradox for investors: a technically attractive entry point amid a fundamentally shaky business model. For those with a short-term horizon, the stock’s oversold condition and positive moving averages may justify a cautious bet, particularly if the company can stabilize its sales in the gaming accessories segment. However, long-term investors should prioritize fundamentals over fleeting technical signals. The looming risk of an unsustainable payout ratio and persistent sales declines makes ACCO a speculative play at best.

As the company navigates a challenging macroeconomic environment, its ability to innovate beyond gaming accessories and mitigate tariff impacts will be critical. Until then, the 7.43% yield remains a double-edged sword—tempting yet perilous.

**Source:[1] ACCO Brands Reports Second Quarter Results [https://ir.accobrands.com/news/news-details/2025/ACCO-Brands-Reports-Second-Quarter-Results/default.aspx][2] ACCO Brands Q2 2025 slides: sales decline 9.9%, tariffs ... [https://www.investing.com/news/company-news/acco-brands-q2-2025-slides-sales-decline-99-tariffs-impact-north-america-93CH-4164668][3] ACCO BRANDS Earnings Results [https://www.quiverquant.com/news/ACCO+BRANDS+Earnings+Results%3A+%24ACCO+Reports+Quarterly+Earnings][4] ACCO Brands Dividends and Buybacks [https://simplywall.st/stocks/us/commercial-services/nyse-acco/acco-brands/dividend]