Stock Analysis | Avery Dennison Outlook - Mixed Signals Amid Weak Technicals and Strong Fund Flow

Market Snapshot: Price Rises Despite Weak Technical Indicators

The stock of Avery Dennison (AVY) has risen by 7.20% recently, but the technical outlook is weak with more bearish indicators than bullish ones. The internal diagnostic score is just 2.9 out of 10, suggesting investors may want to avoid it for now.

News Highlights

• Oreo maker sues Aldi – Mondelez International is suing Aldi over allegations of packaging infringement, which may indicate a broader trend of increased legal scrutiny in the packaging and food sectors.
• EPE USA leads sustainable packaging – EPE USA is pushing for eco-friendly solutions, such as reusable and recyclable packaging materials. This aligns with global shifts toward sustainability and may indirectly benefit Avery Dennison if consumer demand for eco-conscious products grows.
• Public Employees Retirement System of Ohio cuts stake – The fund reduced its holdings in Packaging Co. of America by 8.4%. While not directly impacting Avery Dennison, this move suggests a potential shift in investor sentiment toward the broader packaging industry.

Analyst Views & Fundamentals

Analysts remain divided, with a simple average rating of 3.80 and a performance-weighted average of 2.43. The latest consensus shows a mix of "Buy," "Strong Buy," and "Neutral" ratings, indicating a lack of strong agreement on the stock's future.

Despite the mixed analyst outlook, the stock's internal fundamental score stands at 5.73 out of 10, which suggests reasonable underlying strength. Here's how key fundamentals stack up:

• Return on Equity (ROE): 31.49% – a solid internal diagnostic score of 0.00 (weak).
• Operating Revenue Growth (YoY): -0.41% – this factor has a score of 2.00 (average).
• Net Operating Cash Flow / Revenue: 4.41% – score: 2.00 (average).
• EV/EBIT: 60.27 – score: 3.00 (strong).
• Profit-MV: -0.71 – score: 3.00 (strong).
• Operating Cash Flow Growth (YoY): -39.37% – score: 1.00 (weak).

The stock appears to have decent fundamentals but is caught between weak technicals and a mixed analyst outlook.

Money-Flow Trends

Big money is showing positive interest in Avery Dennison. The fund-flow pattern shows a strong positive overall trend with all block sizes (large, extra-large, and medium) showing inflow ratios above 50%. The overall inflow ratio is 51.04%, with the internal diagnostic score standing at 7.93 out of 10. This suggests strong institutional or large-cap investor confidence in the stock despite the recent technical weakness.

Key Technical Signals

The technical indicators are clearly bearish. The internal diagnostic score for the stock is 2.9 out of 10, with three bearish signals and no bullish ones in the last 5 days:

• WR Overbought: Score 1.00 – this indicates a strong bearish bias, historically leading to average returns of -1.01% with a win rate of 28.21%.
• 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 to bearish with an average return of 0.24% and a 44.44% win rate.

Recent chart patterns show WR Overbought signals on August 13 and 12, 2025, and Bearish Engulfing on August 6, 2025. These suggest a weak momentum phase with a risk of further decline in the short term.

Conclusion

Avery Dennison is in a tricky position right now. While institutional money is flowing in and fundamentals remain relatively strong, the technical picture is bearish with a low internal diagnostic score of 2.9. Analysts are also divided, with no clear consensus on the stock’s direction.

Actionable takeaway: Consider waiting for a pull-back or clearer momentum before entering a position. For now, the technical weakness and mixed sentiment make it a stock to watch, not chase.