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

Market Snapshot

Headline takeaway: Avery Dennison (AVY) is showing weak technical signals with a price drop of -5.06%, while fundamental factors remain moderately positive. Analyst ratings are mixed, and big-money flows remain negative.

News Highlights

Recent headlines:

• Oreo sues Aldi over packaging: Mondelez International (Oreo’s parent) filed a lawsuit against Aldi, claiming its store-brand cookies and crackers copy its packaging. This could impact Avery Dennison if Avery supplies materials for such packaging.
• Sustainable packaging trends: EPE USA is advancing custom, reusable, and recyclable packaging solutions, reflecting a growing industry trend that could benefit Avery Dennison, a leader in labels and packaging materials.
• Cleanfarms pilot program: A new ag-plastic recycling initiative in Canada highlights rising global interest in eco-friendly packaging, another area where Avery Dennison operates.

Analyst Views & Fundamentals

Avery Dennison has a simple average rating score of 3.80 and a performance-weighted rating of 2.43. Analyst ratings are mixed — there are two Neutral, one Strong Buy, and two Buy ratings — which indicates a lack of consensus. This contrasts slightly with the stock’s negative price trend (-5.06%), suggesting analysts may be cautious about near-term risks.

Key fundamental factors:

• Net profit margin: 8.13% — internal diagnostic score: 4.17
• Operating cycle: 121.77 days — internal diagnostic score: 1.00
• Net cash flow from operating activities / Operating revenue: 4.41% — internal diagnostic score: 2.65
• Total assets growth rate: 1.95% — internal diagnostic score: 3.00
• Equity ratio (Total liabilities / Shareholders’ equity): 2.89% — internal diagnostic score: 2.65
• Net profit / Total operating revenue: 8.13% — internal diagnostic score: 4.17

The company maintains a strong net profit margin, but its operating cycle is a concern — suggesting slower cash conversion. The mixed analyst ratings indicate caution, especially in light of the current technical indicators.

Money-Flow Trends

Avery Dennison is seeing a negative overall fund flow trend (-), indicating institutional selling pressure. Large and extra-large investors are also contributing to the negative trend, with inflow ratios of 0.507 and 0.482, respectively. In contrast, small investors show a positive trend (+) with an inflow ratio of 0.511, suggesting retail interest is still present. However, the block flow is negative, which often signals bearish sentiment from big players. This divergence between big-money and small investors may indicate a period of uncertainty.

Key Technical Signals

The technical analysis score is 2.65, reflecting a weak trend. Here's a breakdown of key indicators:

• WR Oversold: internal diagnostic score: 3.71 — historically neutral but appearing multiple times in the last five days.
• MACD Death Cross: internal diagnostic score: 2.65 — a bearish signal with weak historical returns (-0.44%).
• Bearish Engulfing: internal diagnostic score: 1.58 — a strong bearish reversal pattern, with poor win rate (36.36%).

Recent chart patterns: The Bearish Engulfing and MACD Death Cross both showed up on 2025-08-28, while WR Oversold appeared five times in the past five days — indicating a high concentration of bearish signals.

Key insight: The technical momentum is clearly bearish, with three bearish vs. zero bullish signals. Investors are advised to avoid the stock due to its weak technical state.

Conclusion

Avery Dennison is currently at a crossroads. While fundamental indicators show a moderate level of strength — particularly in profit margins — the technical side is weak and the analyst consensus is mixed. With institutional selling pressure and bearish chart patterns dominating, it might be wise to consider waiting for a pullback or look for a more favorable entry point. Given the internal diagnostic technical score of 2.65 and the presence of key bearish patterns, it’s prudent to proceed with caution in the near term.