Avery Dennison Corporation Price, Consensus and EPS Surprise


Avery Dennison Corporation AVY delivered adjusted earnings of $2.46 per share in third-quarter 2022, missing the Zacks Consensus Estimate of $2.51. The bottom line, however, marked a 15% improvement year over year.

Including one-time items, the company reported earnings per share (EPS) of $2.70 compared with the year-ago quarter’s $1.96 per share.

Total revenues increased 11.8% year over year to $2,317 million, but missed the Zacks Consensus Estimate of $2,323 million.

Cost of sales in the quarter rose 11.9% year over year to $1,703.5 million. The gross profit rose 11.7% year over year to $619 million.

Avery Dennison Corporation Price, Consensus and EPS Surprise

Avery Dennison Corporation price-consensus-eps-surprise-chart | Avery Dennison Corporation Quote

Marketing, general and administrative expenses were $330.8 million compared with the $297 million incurred in the year-ago quarter. The adjusted operating profit was around $228 million compared with the prior-year quarter’s $257 million. The adjusted operating margin was 12.4%, flat compared with the year-ago quarter.

Segment Highlights

Revenues in the Label and Graphic Materials segment increased 11.6% year over year to $1,502 million in the reported quarter. On an organic basis, sales were up 20.4%. Label and Packaging Materials saw an organic sales growth of more than 20% aided by strong growth in high-value and base product categories. The Graphics and Reflective Solutions businesses reported growth of mid-to-high single digits organically. The segment’s adjusted operating profit increased 12% year on year to $207.6 million.

Revenues in the Retail Branding and Information Solutions segment rose 17.4% year over year to $623 million. On an organic basis, sales were up 7.2%, reflecting growth in the high-value product categories. Meanwhile, sales dipped low-single digits organically in base apparel, as customers adjusted inventory levels. The segment’s adjusted operating income was $79.2 million compared with the year-ago quarter’s $73.1 million.

Net sales in the Industrial and Healthcare Materials segment totaled $191.5 million, down 4% from the prior-year quarter. The segment however witnessed organic growth of 5%. The segment reported an adjusted operating income of $21 million compared with the prior-year quarter’s $19 million.

Financial Updates

The company has returned $497 million in cash to shareholders through share repurchases and dividend payments in the first nine-month period of 2022 and also invested $37 million in acquisitions. AVY has also repurchased 1.8 million shares throughout the time period.

Avery Dennison ended the third quarter with cash and cash equivalents of $128 million compared with $207 million at the end of the prior-year quarter. The company’s long-term debt increased to $2,463 million from $2,800 million at the end of the prior-year quarter. The company’s net debt to adjusted EBITDA ratio was 2.1.


Avery Dennison now expects adjusted EPS for 2022 in the band of $9.70 to $9.85, down from the prior guidance of $9.70-$10.00.

Price Performance

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Shares of AVY have declined 16.4% in the past year compared with the industry’s fall of 15.1%.

Zacks Rank and Stocks to Consider

Avery Dennison currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Industrial Products sector are Tenaris TS, Enerpac Tool Group Corp. EPAC and Reliance Steel & Aluminum Co. RS. While TS and EPAC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 28% in the past year.

Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 27.1% in the past year.

Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 26% in the past year.

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Avery Dennison Corporation (AVY): Free Stock Analysis Report
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