Stock Analysis | Avery Dennison Outlook - Weak Technicals and Mixed Analysts Amid Sustainable Packaging News

Market Snapshot – Bearish Trend with Mixed Analyst Ratings

Avery Dennison (AVY) is under pressure with weak technical indicators and a price drop of -3.41% recently, while analysts show mixed signals, with a simple average rating of 3.80 and a performance-weighted rating of 2.43.

News Highlights – Focus on Sustainability and Legal Developments

• EPE USA's Sustainable Packaging Solutions: A rising trend in eco-friendly packaging is highlighted by companies like EPE USA, which is focusing on reusable and recyclable materials. This could influence Avery Dennison’s strategy as sustainability becomes a stronger market driver.
• Oreo Maker Sues Aldi: Mondelez, which makes Oreos, is suing Aldi for alleged packaging copying. While this may not directly impact Avery Dennison, it highlights growing legal tensions in branding and packaging across the industry, which could affect Avery Dennison’s market.
• New Deposit Refund Schemes: A new policy in Himachal Pradesh, India, is offering cash refunds for returned non-biodegradable packaging. This reinforces global efforts toward sustainable packaging and could indirectly boost demand for Avery Dennison’s products in regions adopting similar policies.

Analyst Views & Fundamentals – Mixed Signals and Key Financials

Analysts remain split, with a simple average rating of 3.80 and a historically adjusted weighted average of 2.43. This suggests a mixed market sentiment, as the current price drop aligns with bearish expectations.

Fundamental Highlights (Internal Diagnostic Scores 0-10)

• Net Profit Margin (NPM): 8.13% (Score: 3)
• Net Cash Flow from Operating Activities / Operating Revenue: 4.41% (Score: 3)
• Net Assets per Share Growth: -2.65% (Score: 3)
• Total Assets Growth: 1.95% (Score: 2)
• Operating Cycle: 121.77 days (Score: 0)

The fundamental score is 6.39, suggesting moderate health in some financial areas but red flags in operational efficiency (operating cycle) and asset growth.

Money-Flow Trends – Institutional Disinterest, Retail Caution

Big-money (block) fund flows show a negative trend with a block_inflow_ratio of 0.498 and an internal diagnostic score of 7.64 (good) for the overall fund-flow model. However, this is counterbalanced by a negative overall trend, indicating caution among large institutional players. In contrast, small and medium investors show positive flows, suggesting retail confidence. This divergence could signal uncertainty in the broader market.

Key Technical Signals – Bearish Momentum and Weak Sentiment

Avery Dennison's technical profile is bearish, with 3 bearish indicators vs. 0 bullish and a low internal diagnostic score of 3.25 (weak). The top signals include:

• Williams %R (WR) Oversold: Score: 3.87 – A weak indicator that suggests caution as it remains in oversold territory with limited upside potential.
• MACD Death Cross: Score: 3.62 – A bearish signal that indicates a weakening trend in momentum.
• Bearish Engulfing Candlestick: Score: 2.27 – A strong bearish reversal pattern.

On 2025-08-28, all three bearish signals were detected, including the WR oversold level, MACD death cross, and bearish engulfing pattern. Recent signals are still negative, with WR oversold persisting on 2025-08-26, 2025-08-27, and 2025-09-02.

Conclusion – Consider Avoiding Until Trend Clarifies

With weak technicals, bearish analyst sentiment, and a recent price drop of -3.41%, Avery Dennison appears to be in a consolidation or pullback phase. The internal diagnostic score is below 4, and bearish indicators dominate. Investors may want to avoid entering new long positions and consider waiting for clearer momentum or positive catalysts such as improved technical readings or strong earnings. For now, a cautious approach is warranted.