Avery Dennison Corporation
) reached a new 52-week high of $50.88 on Dec 27, surpassing the
previous high of $49.97. The company's shares closed at $50.48 at
the end of trading on Dec 27, with a solid one-year return of
about 48.5% and year-to-date return of 48%, outperforming the
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This Pasadena, CA-based pressure-sensitive materials producer has
delivered positive earnings surprises over the past four quarters
with an average surprise of 5.69%. Avery has a market cap of $4.9
billion and a long-term expected earnings growth of 21.7%.
Average volume of shares traded over the last three months is
What's Driving Avery Up?
On Oct 25, Avery reported adjusted earnings of 69 cents per share
in the third quarter of 2013, up 35% year over year and ahead of
the Zacks Consensus Estimate of 65 cents. Results benefited from
the growth in revenues in the core segments as well as Avery's
restructuring and other productivity actions that were initiated
For 2013, Avery raised its adjusted earnings forecast to the
range of $2.60 to $2.70 per share from the previous range of
$2.40 to $2.60. The revised guidance reflects annual growth of
33% to 38%.
Avery has aggressively implemented a restructuring program to
reduce costs across all business segments. The program is
anticipated to be completed by mid 2013. Avery expects to save
more than $100 million annually by mid-2013, through leveraging
In addition, Avery remains committed to its long-term targets (by
2015) of sales growth in the range of 3% to 5% and net income
growth of 10-15%. Earnings per share growth of 15-20% is expected
from continued expansion in emerging markets and productivity
Moreover, with the divestiture of the underperforming Office and
Consumer Products unit, Avery Dennison will be able to focus on
its core segments and augment its growth profile. Further share
repurchases is also expected to boost Avery's earnings.
Avery currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Better-ranked stocks in the same industry are
Pitney Bowes Inc.
). All these stocks hold a Zacks Rank #2 (Buy).