📊 AVY Key Takeaways
Investment Thesis
Avery Dennison demonstrates solid operational fundamentals with strong profitability metrics (28.8% gross margin, 10.4% operating margin) and excellent returns on equity at 30.7%, supported by robust free cash flow generation of $712.4M. The company maintains healthy interest coverage of 32.3x and generates substantial operating cash flow, though modest revenue growth of 1.1% YoY and declining net income warrant closer monitoring of market headwinds.
AVY Strengths
- Exceptional ROE of 30.7% indicates efficient capital deployment and strong shareholder value creation
- Robust free cash flow of $712.4M with 8.0% FCF margin supports dividends and debt reduction
- Strong interest coverage ratio of 32.3x provides substantial debt service cushion
- Solid gross and operating margins above 28% and 10% respectively demonstrate pricing power and cost control
- Operating cash flow of $881.4M exceeds net income, indicating high quality earnings
AVY Risks
- Revenue growth of only 1.1% YoY suggests market maturity or competitive pressures in the converted paper products sector
- Net income declined 2.4% YoY despite stable revenue, indicating margin compression or operational challenges
- Elevated leverage with 1.43x debt-to-equity ratio combined with $3.2B long-term debt limits financial flexibility
- Quick ratio of 0.76x below 1.0x signals potential liquidity constraints in near-term obligations
- Current ratio of 1.13x is relatively thin, providing limited buffer for operational disruptions
Key Metrics to Watch
- Revenue growth acceleration/deceleration trends - stalled 1.1% growth needs reversal
- Operating margin sustainability - monitor for further compression given net income decline
- Free cash flow conversion and capital allocation priorities between debt reduction and reinvestment
- Debt-to-equity ratio trajectory - assess deleveraging progress toward 1.2x or lower
- Liquidity ratios - improvement needed in current and quick ratios above 1.25x and 0.90x respectively
AVY Financial Metrics
💡 AI Analyst Insight
Avery Dennison Corp presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
AVY Profitability Ratios
AVY vs Default Sector
How Avery Dennison Corp compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
AVY Balance Sheet & Liquidity
AVY 5-Year Financial Trend
5-Year Trend Summary: Avery Dennison Corp's revenue has shown modest growth of 5% over the 5-year period. The most recent EPS of $6.20 reflects profitable operations.
AVY Growth Metrics (YoY)
AVY Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $2.2B | $166.3M | $2.13 |
| Q2 2025 | $2.2B | $176.8M | $2.18 |
| Q1 2025 | $2.1B | $166.3M | $2.09 |
| Q3 2024 | $2.1B | $138.3M | $1.71 |
| Q2 2024 | $2.1B | $100.4M | $1.24 |
| Q1 2024 | $2.1B | $121.2M | $1.49 |
| Q3 2023 | $2.1B | $138.3M | $1.71 |
| Q2 2023 | $2.1B | $100.4M | $1.24 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AVY Capital Allocation
AVY SEC Filings
Access official SEC EDGAR filings for Avery Dennison Corp (CIK: 0000008818)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AVY
What is the AI rating for AVY?
Avery Dennison Corp (AVY) has an AI rating of BUY with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are AVY's key strengths?
Exceptional ROE of 30.7% indicates efficient capital deployment and strong shareholder value creation. Robust free cash flow of $712.4M with 8.0% FCF margin supports dividends and debt reduction.
What are the risks of investing in AVY?
Revenue growth of only 1.1% YoY suggests market maturity or competitive pressures in the converted paper products sector. Net income declined 2.4% YoY despite stable revenue, indicating margin compression or operational challenges.
What is AVY's revenue and growth?
Avery Dennison Corp reported revenue of $8.9B.
Does AVY pay dividends?
Avery Dennison Corp pays dividends, with $288.4M distributed to shareholders in the trailing twelve months.
Where can I find AVY SEC filings?
Official SEC filings for Avery Dennison Corp (CIK: 0000008818) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AVY's EPS?
Avery Dennison Corp has a diluted EPS of $8.79.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.