Stock Analysis | Avery Dennison Outlook - Technical Weakness and Mixed Analyst Signals

Market Snapshot

Avoid for now: Avery Dennison is showing a weak technical outlook with a high concentration of bearish signals. The stock’s fundamentals remain mixed but are rated as relatively strong by our internal model.

News Highlights

Recent news affecting the broader packaging industry includes:

• Oreo’s parent company sues Aldi over packaging: Mondelez International filed a lawsuit alleging Aldi copies its cookie and cracker packaging. While not directly involving Avery Dennison, this highlights ongoing tensions and legal actions in the packaging and snack sectors.
• EPE USA pushes sustainable packaging: EPE USA is advancing eco-friendly solutions, such as reusable and recyclable materials. This trend may indirectly benefit Avery Dennison if consumer demand for sustainable options grows.
• Himachal Pradesh introduces a deposit refund scheme: The Indian state is offering cash back for returned non-biodegradable packaging. This could signal a global shift toward stricter packaging regulations, potentially affecting Avery Dennison’s operations in the long term.

Analyst Views & Fundamentals

Analyst consensus for Avery Dennison is mixed, with a simple average rating of 3.80 and a historical performance-weighted average of 2.43. The ratings are inconsistent, with recent predictions ranging from "Strong Buy" to "Buy" and "Neutral," and no clear agreement on the stock’s direction.

The recent price trend has seen a 2.43% rise, but this upward movement contrasts with the generally neutral to bearish sentiment from analysts. This mismatch suggests a potential short-term divergence between market mood and analyst expectations.

Key Fundamental Factors

• Net income to revenue (-17.93%) – score: 2.00 (internal diagnostic score)
• Operating cycle (121.77 days) – score: 0.00 (internal diagnostic score)
• Net cash flow from operations to revenue (4.41%) – score: 2.00 (internal diagnostic score)
• PE ratio (82.62) – score: 1.00 (internal diagnostic score)
• Shareholders’ equity to liabilities (34.58%) – score: 2.00 (internal diagnostic score)
• Current assets to total assets (37.16%) – score: 4.00 (internal diagnostic score)

These factors show a mixed picture. While liquidity and asset composition are fairly healthy, profitability and earnings are under pressure, with a weak net income margin.

Money-Flow Trends

Avery Dennison is seeing positive overall fund flow, with all major categories (small, medium, large, and extra-large) showing inflows. The overall inflow ratio is 50.92%, with large and extra-large investors particularly active (inflow ratios of 51.05% and 51.05%, respectively).

This indicates institutional and retail confidence is building, which contrasts with the weak technical signals. However, the inflow may reflect long-term positioning rather than short-term trading sentiment.

Key Technical Signals

Technically, Avery Dennison is struggling. The stock currently holds an internal diagnostic score of 2.15, with 3 bearish indicators and 0 bullish ones over the past five days. Key signals include:

• WR Overbought – score: 1.00 (internal diagnostic score): Indicates overbought conditions are bearish historically, with a 26.32% win rate and -1.13% average return.
• Bearish Engulfing – score: 2.98 (internal diagnostic score): A neutral-to-bearish reversal pattern, appearing recently on 2025-08-15.
• MACD Golden Cross – score: 2.48 (internal diagnostic score): Usually bullish, but here it was neutral and appeared alongside a WR Overbought signal on 2025-08-12.

Recent chart patterns include multiple WR Overbought signals, especially around mid-August, and a Bearish Engulfing pattern. These suggest the stock may be correcting or reversing after a short rally.

Conclusion

Avery Dennison is in a technical no-man’s-land—showing strong fund flows and mixed fundamentals but plagued by bearish chart patterns. Our internal diagnostic score of 2.15 and the dominance of bearish signals suggest caution. While the company’s fundamentals and recent institutional activity offer some support, the current technical trend is weak.

Actionable takeaway: Consider waiting for a pull-back or clearer technical confirmation of a bottom before entering a position. Keep an eye on the stock’s earnings report for further clues on fundamentals.