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

1. Market Snapshot

Headline Takeaway: Avery Dennison (AVY) is currently facing a weak technical outlook with mixed fundamental signals and a recent price drop of -2.12%. Investors should approach cautiously based on recent chart patterns.

2. News Highlights

While most recent news does not directly impact Avery Dennison, it’s worth noting the broader context in the packaging and food sectors:

• Mondelez sues Aldi for alleged packaging copying, highlighting a growing trend of brands protecting intellectual property in the food and snack industry. This could signal a broader shift in how packaging is treated as a key brand asset—potentially relevant for Avery Dennison, a major label and packaging player.
• EPE USA is pushing for sustainable packaging solutions, aligning with global trends. Avery Dennison’s business model, which includes sustainable label and packaging solutions, could benefit from this momentum in the long term.
• Several institutional investors are adjusting holdings in the broader packaging sector, including a notable stake reduction in Packaging Co. of America. This suggests a cautious stance in the sector, which could weigh on AVY in the short term.

3. Analyst Views & Fundamentals

Avery Dennison has drawn mixed analyst views in the past 20 days, with a simple average rating of 3.80 and a performance-weighted rating of 2.43. Analysts are split, with ratings ranging from “Strong Buy” to “Underperform.” Despite this, the current price trend of -2.12% aligns with the neutral to bearish market expectations, as per our analysis.

Key Fundamental Factors (Internal Diagnostic Scores 0-10):

• Shareholders’ equity / total liabilities: 0.35% (Score: 2.00) – A weak equity position relative to debt may raise concerns about leverage.
• Annualized return on equity: 31.49% (Score: 0.00) – A high return on equity, but it’s out of the top quartile for performance.
• Total assets growth YoY: 1.95% (Score: 1.00) – Slightly positive but underperforming relative to peers.
• Equity multiplier: 3.89 (Score: 2.00) – Suggests moderate leverage but not alarming.
• Total operating revenue growth YoY: -0.41% (Score: 2.00) – Slight contraction in operating revenue raises concerns.
• Price-to-sales (PS) ratio: 7.03 (Score: 0.00) – A high PS ratio may signal overvaluation relative to revenue.
• Gross profit margin: 28.85% (Score: 0.00) – A healthy margin, but not a top performer.
• Operating cash flow / revenue: 4.41% (Score: 2.00) – Positive but not robust.
• PE ratio: 82.62 (Score: 3.00) – High valuation multiple may deter investors.

4. Money-Flow Trends

Avery Dennison has seen positive overall money flow in the last 5 days, with large and extra-large institutional flows slightly more bearish. Specifically:

• Small-cap investor inflow ratio: 51.34% (Positive trend)
• Medium-cap investor inflow ratio: 50.80% (Slightly positive)
• Large-cap investor inflow ratio: 52.96% (Positive)
• Extra-large-cap investor inflow ratio: 48.85% (Slightly negative)

The fund-flow score is 7.64 (Good), suggesting that while retail and mid-sized investors are showing interest, top-tier institutions remain cautious. This may indicate a mixed sentiment between retail optimism and institutional skepticism.

5. Key Technical Signals

Technically, Avery Dennison is in a weak position with a score of 3.27 (internal diagnostic score 0-10), based on 5 recent indicators over the last 5 days:

Indicator Breakdown:

• WR Overbought – Score: 1.00 – A very bearish signal indicating overextended bullish conditions.
• Marubozu White – Score: 3.27 – A bearish reversal pattern.
• Bearish Engulfing – Score: 2.27 – A strong bearish candlestick formation.
• MACD Death Cross – Score: 3.62 – A bearish momentum divergence.
• WR Oversold – Score: 6.20 – A mildly bullish signal, but not strong enough to counter the bearish bias.

Recent Patterns by Date:

• 2025-08-22: WR Overbought, Marubozu White – Strong bearish signals
• 2025-08-26: WR Oversold – Weak bullish signal
• 2025-08-28: WR Oversold, MACD Death Cross, Bearish Engulfing – Extremely bearish

With 4 bearish vs 0 bullish signals, the technical outlook is decisively bearish. The chart suggests a lack of clear momentum and a potential pullback or further decline if these patterns persist.

6. Conclusion

Actionable Takeaway: Avery Dennison’s technical indicators are currently bearish with a low internal diagnostic score of 3.27, while fundamentals and analyst ratings remain mixed. Despite positive fund-flow from smaller investors, large institutional players appear cautious. Consider waiting for a clearer breakout or a pull-back before committing capital. A closer watch on earnings or broader sector movements may also provide clearer direction.