Stock Analysis | Avery Dennison Outlook - A Cautious Setup Amid Mixed Fundamentals

Market Snapshot

Avoid for now: Technical indicators show a weak trend, with 3 bearish signals and no bullish ones. The internal diagnostic score is a low 1.8 (10 = best).

News Highlights

Recent news includes:

• Mondelez sues Aldi for alleged packaging copycatting, which could have ripple effects across the packaging sector. This may indirectly affect Avery Dennison if packaging litigation trends grow.
• EPE USA is making strides in sustainable packaging solutions, highlighting a growing market trend that Avery Dennison might need to adapt to in the long term.
• Himachal Pradesh announced a deposit refund scheme for non-biodegradable packaging, further emphasizing global shifts toward eco-friendly alternatives.

Analyst Views & Fundamentals

Average rating score: 3.80 (simple mean of recent analyst ratings).

Weighted rating score: 2.43 (adjusted for historical performance).

Analysts are divided, with ratings ranging from "Strong Buy" to "Neutral." Most are cautious or negative, with only one "Strong Buy" and two "Neutral" ratings. This lack of consensus is reflected in the "There are differences" assessment.

How this aligns with price trend: The stock has risen 4.44% recently, but the analysts' mixed and generally neutral or bearish outlook creates a mismatch with the current price trend.

Key fundamental factor values and internal diagnostic scores:

• Shareholders’ equity attributable to parent company / Total liabilities (%): 34.58% → Internal diagnostic score: 2/10.
• Gross profit margin (%): 28.85% → Internal diagnostic score: 0/10.
• Net income-Revenue: -18.15% → Internal diagnostic score: 1/10.
• Rate of return on total assets (%): 6.45% → Internal diagnostic score: 3/10.
• Current assets turnover ratio: 1.40 → Internal diagnostic score: 3/10.
• Operating revenue (YoY growth rate %): -0.41% → Internal diagnostic score: 2/10.

Money-Flow Trends

Avery Dennison has seen positive inflows across all investor categories, with large and extra-large investors showing the strongest interest (inflow ratios 51.37% and 50.93%, respectively).

• Small investor trend: Positive, with inflow ratio at 51.48%.
• Large investor trend: Positive, with inflow ratio at 51.37%.
• Extra-large investor trend: Positive, with inflow ratio at 50.93%.

The internal diagnostic score for fund flow is 7.93 (10 = best), indicating strong and consistent interest from both retail and institutional investors.

Key Technical Signals

Internal diagnostic score: 1.8/10 (10 = best).

Technical indicators are bearish, with 3 bearish and 0 bullish signals over the last 5 days.

Recent indicators:

• WR Overbought (Biased bearish) – score: 1.00
• MACD Golden Cross (Biased bearish) – score: 1.42
• Bearish Engulfing (Neutral bias) – score: 2.98

Key insights: Bearish signals are dominant (3 vs 0 bullish), and the overall trend suggests weakness. Investors should be cautious of a possible decline.

Conclusion

Avery Dennison is in a precarious position: fundamentals remain mixed, technicals are bearish, and analysts are split. While money flow remains positive, the technicals suggest caution. Consider waiting for a pull-back or clearer signals before entering a position. If you're already in the stock, a stop-loss may be prudent given the weak momentum.