The Zacks Analyst Blog Highlights: Avery Dennison, 3M, Staples, Office Depot and Bemis Company - Press Releases

A generic image of a pair of glasses on top of a calculator
Credit: Shutterstock photo

For Immediate Release

Chicago, IL - January 5, 2012 - announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Avery Dennison Corporation ( AVY ), 3M Co. ( MMM ), Staples, Inc. ( SPLS ), Office Depot, Inc. ( ODP ) and Bemis Company Inc. ( BMS ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Wednesday's Analyst Blog:

Avery Dennison Selling Office Biz

Avery Dennison Corporation ( AVY ) is divesting its underperforming Office and Consumer Products to its competitor 3M Co. ( MMM ), the maker of Post-it notes and Scotch Tape, for $550 million in cash.

The Office and Consumer Products segment contributed approximately 13% to Avery's total revenue in fiscal 2010 and in the most recently reported third quarter of 2011. The segment manufactures and sells a wide range of office and printable media products under the Avery brand name for office, school and home uses.

The segment also offers an array of stationery products, including writing instruments, markers, adhesives and specialty products under popular brand names such as Avery, Marks-A-Lot and HI-LITER.

This is a long-struggling segment of Avery with weak end market demand, facing cutthroat competition in the label category. Margins have been affected due to increased investment in demand creation, consumer promotions, and innovation, as well as lower volumes.

Demand for office supplies has suffered in recent years as businesses and governments slashed spending on administrative operations because of lower revenue. Moreover, profit margins on office products have come under pressure as retailers such as Staples, Inc. ( SPLS ) and Office Depot, Inc. ( ODP ) have expanded the product lines of their own-store brands.

Avery estimates the segment to generate sales of approximately $765 million in 2011, a 6% drop from 2010 sales of $816 million. Adjusted operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) is projected at approximately $80 million and $95 million, respectively. Avery Dennison Corporation expects total sales in 2011 to be approximately $6 billion sans Office Consumer Product.

Avery Dennison had earlier reduced its fiscal 2011 EPS guidance to between $2.15 and $2.30 following apprehensions of continued weakness in volumes.

The transaction is expected to be completed in the second half of 2012. Avery Dennison intends to use the proceeds from the transaction primarily to reduce debt, make additional pension contributions and repurchase shares.

As of October 1, 2011, Avery's cash and cash equivalent plunged to $119.7 million from $157.8 million at October 2, 2010. Long-term debt also decreased to $954.5 million as of October 1, 2011 from $1.07 billion as of October 2, 2010.

Avery Dennison reported a disappointing third quarter with its adjusted EPS plunging 23% year over year to 48 cents. However, revenues of $1.7 billion rose 4% year over year on revenue growth in two segments - Pressure-sensitive Materials and Other specialty converting businesses. Specifically, revenues of the Office and Consumer Products segment fell 4.4% to $219.7 million.

Avery's largest business is the manufacturing of pressure-sensitive materials, which include labels for foods, beverages and auto interiors. Its retail branding and information solutions arm produces garment tags and other services.

The company experienced unexpected declines in volumes in both the segments across all geographical regions in the second quarter that continued into the third. Now with the weaker Office Products business sold out, the company will be able to focus on its market-leading, pressure-sensitive materials business, and Retail Branding and Information Solutions segment.

We have recently downgraded our recommendation on Avery from Neutral to Underperform reflecting lower volume expectations for the fourth quarter of 2011, a higher tax rate and weak results in two of its largest businesses. The shares of Avery Dennison are currently maintaining a Zacks #5 Rank (Strong Sell rating) over the short term that corresponds with our Underperform recommendation.

Pasadena, California-based Avery Dennison produces pressure-sensitive materials, office products and a variety of tickets, tags, labels and other converted products. Avery is a Fortune 500 company operating over 200 manufacturing and distribution facilities with roughly 32,000 employees in more than 60 countries. It competes with Bemis Company Inc. ( BMS ).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at .

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

AVERY DENNISON ( AVY ): Free Stock Analysis Report

BEMIS ( BMS ): Free Stock Analysis Report

3M CO ( MMM ): Free Stock Analysis Report

OFFICE DEPOT ( ODP ): Free Stock Analysis Report

STAPLES INC ( SPLS ): Free Stock Analysis Report

To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More