Stock Analysis | Avery Dennison Outlook - Mixed Signals Amid Fundamentals and Weak Technicals

Market Snapshot

Headline takeaway: Avery Dennison (AVY) is currently in a downward price trend (-2.53%), with technical indicators signaling bearish momentum and weak chart signals. However, its fundamentals remain in mid-tier territory and show some positive aspects like strong cash flow.

News Highlights

• Oreo maker sues Aldi over packaging: While seemingly unrelated to Avery Dennison, this legal battle highlights growing scrutiny over brand image and packaging in the consumer goods sector, which could indirectly affect AVY’s labeling and materials business.
• EPE USA pushes sustainable packaging: EPE USA’s recent moves to develop eco-friendly packaging solutions could increase industry demand for sustainable materials—potentially beneficial for Avery Dennison, which also has a presence in labeling and packaging solutions.
• Public Employees Retirement System of Ohio cuts stake in PKG: While this is about Packaging Co. of America (PKG), it reflects a broader trend of institutional investors adjusting their exposure to the packaging sector, which could affect AVY’s investor sentiment.

Analyst Views & Fundamentals

Average Rating Score: The simple average of analyst ratings is 3.80, while the performance-weighted rating is 2.43, indicating a generally neutral-to-bearish outlook among analysts.

Rating Consistency: Analysts are divided in their views—some label the stock as "Underperform," while others rate it "Neutral" or even "Strong Buy." The price trend (down 2.53%) aligns with the bearish expectations, as the weighted rating is below average.

Key Fundamental Factors

• Operating Cycle: 121.77 days (Internal diagnostic score: 0). High operating cycle means longer time to convert sales into cash.
• Net Cash Flow from Operating Activities / Operating Revenue: 4.41% (Internal diagnostic score: 1). Relatively weak cash flow generation.
• Profit-MV: -7.66% (Internal diagnostic score: 3). Indicates margin pressures, though the score is average.
• Total Operating Revenue YoY Growth Rate: -0.41% (Internal diagnostic score: 2). Slight decline in top-line growth.
• Cash-UP: 0.24% (Internal diagnostic score: 3). Shows modest cash generation efficiency.

Money-Flow Trends

Big-money and retail flows are mixed, but overall positive. Large investors are inflating their positions more aggressively than smaller ones: Large inflow ratio is 0.52, while Small inflow ratio is 0.51. The overall trend is positive, with block inflow ratio at 0.51, suggesting strong institutional support despite the price drop.

Key Technical Signals

Avery Dennison’s technical signals are weak, with bearish patterns dominating the recent 5-day period. Here's the breakdown of internal diagnostic scores (0-10, 10 = best):

• WR Overbought: Internal diagnostic score: 1 — Very weak bearish signal.
• WR Oversold: Internal diagnostic score: 6.2 — Neutral but weakly positive.
• Bearish Engulfing: Internal diagnostic score: 2.27 — Slightly bearish.
• Marubozu White: Internal diagnostic score: 4.06 — Neutral, but not a strong buy signal.

Recent Chart Patterns (Last 5 Days):

• 20250822: WR Overbought + Marubozu White — Mixed signals, but bearish bias from WR.
• 20250815: Bearish Engulfing — Strong bearish pattern.
• 20250826: WR Oversold — Slight positive sign.

Key Insight: The technical side is weak with bearish signals dominating (2 bearish vs 0 bullish), and the market is in a volatile state with an unclear direction. Investors should be cautious.

Conclusion

With a technical score of 3.38 and weak chart patterns, Avery Dennison remains a stock to monitor cautiously. While fundamentals show some positive cash flow signs, the price is under pressure and analyst views are mixed. Consider waiting for a pull-back and improved technical clarity before committing capital.