Is Avery Dennison Stock Underperforming the Nasdaq?

Avery Dennison Corporation (AVY), headquartered in Mentor, Ohio, is a leading global materials science and digital identification solutions company. Valued at $15.2 billion by market cap, the company provides a wide range of branding and information solutions. Its products and solutions include pressure-sensitive materials, radio frequency identification (RFID) inlays, tickets, tags, labels, and other converted products.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and AVY perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the packaging & containers industry. AVY's expertise in AI and machine learning, sets it apart in the industry. Its strategic emphasis on high-value segments and Intelligent Label solutions is driving mid-to-high-teens organic sales growth, while its innovative RFID technology and diversified product portfolio solidify its competitive advantage and unlock new market potential. 

Despite its notable strength, AVY slipped 18.9% from its 52-week high of $233.48, achieved on Jul. 23. Over the past three months, AVY stock has declined 14.6%, underperforming the Nasdaq Composite’s ($NASX)10.1% gains during the same time frame.

In the longer term, shares of AVY dipped 15.5% over the past six months and fell 6.2% over the past 52 weeks, underperforming NASX’s six-month gains of 12.4% and solid 32.8% returns over the last year.

To confirm bearish trend, AVY has been trading below its 50-day moving average since mid-June, experiencing some fluctuations. The stock is trading below its 200-day moving average since late October. 

On Oct. 23, AVY shares closed down more than 2% after reporting its Q3 results. Its adjusted EPS of $2.33 exceeded Wall Street expectations of $2.32. The company’s revenue was $2.18 billion, failing to meet Wall Street forecasts of $2.2 billion. AVY expects full-year adjusted EPS to be between $9.35 and $9.50.

AVY’s rival, Sealed Air Corporation (SEE) has lagged behind the stock, declining 3.4% over the past six months and 6.9% over the past 52 weeks.

Wall Street analysts are moderately bullish on AVY’s prospects. The stock has a consensus “Moderate Buy” rating from the 12 analysts covering it, and the mean price target of $241.42 suggests a potential upside of 27.5% from current price levels.