Stock Analysis | Avery Dennison Outlook - Neutral Technicals, Mixed Analyst Views, and Stronger Fundamentals

Market Snapshot

Avery Dennison (AVY) is in a technical holding pattern, with mixed analyst ratings but improving fundamentals showing modest promise. While the stock has fallen 6.40% recently, our internal diagnostic score for technicals is 5.98, suggesting caution and neutrality in the near term.

News Highlights

Recent news impacting the packaging and materials sector includes:

• Berlin Packaging’s partnership with Origin Materials to use sustainable PET bottle caps is a positive sign for eco-friendly packaging trends. This could indirectly benefit Avery Dennison as the sector gains traction.
• Karat Packaging’s quarterly dividend declaration of $0.45 per share signals financial stability in the packaging industry. While Karat is not directly tied to AVY, it highlights sector confidence.
• Graphic Packaging (GPK) beat earnings estimates in Q2, indicating potential industry-wide tailwinds. Improved performance in the sector may eventually filter to Avery Dennison if revenue trends stabilize.

Analyst Views & Fundamentals

Avery Dennison is facing mixed analyst opinions, with five analysts active in the last 20 days. The simple average rating is 3.80, while the historical performance-weighted rating is 2.19, indicating a more cautious outlook when factoring in past accuracy. Ratings are not aligned, with one "Strong Buy," two "Buy," and two "Neutral" calls.

Notably, Citigroup’s analyst Anthony Pettinari has the best performance history (66.7% accuracy), though with just one recent "Neutral" rating. In contrast, analysts from BMO Capital and Raymond James have lower historical accuracy (25-33%) and issued "Buy" ratings recently.

The stock is currently down 6.40%, matching the weighted market expectation for a neutral outcome. This suggests that the price action is in line with the blended analyst outlook, albeit with uncertainty.

Key fundamentals include:

• Net assets per share growth rate: -2.65% (Internal diagnostic score: 3)
• Basic earnings per share growth rate: 3.92% (Score: 1)
• Total operating revenue growth rate: -0.41% (Score: 1)
• Operating revenue growth rate: -0.41% (Score: 1)
• Net cash flow from operating activities growth rate: -39.37% (Score: 2)
• ROE (diluted): 16.14% (Score: 4)
• PCF (Price to Cash Flow): 81.12 (Score: 4)
• Cash-UP: 0.63 (Score: 6)

The fundamentals are mixed, with cash flow metrics lagging but cash availability (Cash-UP) showing strength.

Money-Flow Trends

Big money is cautious on Avery Dennison, with large and extra-large institutional funds showing negative flow trends. However, retail (small) investors are showing positive inflow (inflow ratio: 50.81%), while medium investors are neutral (49.30%). The overall inflow ratio is 49.75%, slightly below average but not alarming.

Our fund-flow score is 7.85 (internal diagnostic score: 7.85), suggesting institutional activity is slightly bearish, but not overwhelmingly so. This implies that while large players are wary, smaller investors may still be accumulating the stock.

Key Technical Signals

Avery Dennison is in a neutral technical phase, with a 5.98 internal diagnostic score, indicating no strong directional bias. The market is in consolidation mode, as per the following insights:

• WR Oversold: Internal diagnostic score 3.81, suggesting weak oversold strength
• Inverted Hammer: Score 7.93, a strong bullish reversal signal
• Marubozu White: Score 5.42, indicating moderate bullish momentum
• RSI Oversold: Score 6.75, signaling potential near-term bounce

Recent chart patterns (August 1-5, 2025):

• August 1: WR Oversold and RSI Oversold
• August 5: WR Oversold and Inverted Hammer

The key takeaway is that the bullish Inverted Hammer on August 5 is the most bullish signal in the recent period, but it is counterbalanced by the WR Oversold reading, which remains a weak indicator. Our technical model recommends a wait-and-watch approach for now, as signals remain mixed and trendless.

Conclusion

Avery Dennison is in a technical holding pattern with no strong directional bias. Analysts are divided, with some showing strong historical performance and others weaker. Fundamentals show modest strength in cash metrics but weak revenue and earnings growth. Money flows are split, with retail investors cautiously buying while institutions remain cautious.

Actionable takeaway: Consider waiting for a clearer breakout or significant earnings report before committing capital. Watch the RSI and WR indicators over the next week for signs of a potential reversal or continuation.