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Aegis Capital Rated Avery Dennison a ‘Hold’

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Price movement

Avery Dennison (AVY) has a market cap of $6.4 billion. It fell 0.47% to close at $70.25 per share on November 21, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.71%, -7.0%, and 14.0%, respectively, on the day.

AVY is trading 1.1% below its 20-day moving average, 5.7% below its 50-day moving average, and 3.9% below its 200-day moving average.

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Related ETF and peers

The Vanguard Materials ETF (VAW) invests 0.93% of its holdings in Avery Dennison. The YTD price movement of VAW was 19.3% on November 21.

The market caps of Avery Dennison’s competitors are as follows:

  • 3M Company (MMM) — $103.1 billion
  • Bemis Company (BMS) — $4.6 billion

AVY’s rating

On November 21, 2016, Aegis Capital initiated coverage of Avery Dennison with a “hold” rating.

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Performance of Avery Dennison in 3Q16

Avery Dennison reported 3Q16 net sales of $1.51 billion, a rise of 2.7% over its net sales of $1.47 billion in fiscal 3Q15. Sales from the company’s Pressure-Sensitive Materials and Retail Branding and Information Solutions segments rose 3.7% and 1.1%, respectively, and sales from its Vancive Medical Technologies segment fell 20.5% between 3Q15 and fiscal 3Q16. The company’s gross profit margin expanded ten basis points during the same period.

AVY’s net income and EPS (earnings per share) rose to $89.1 million and $0.98, respectively, in 3Q16, compared to $81.7 million and $0.88, respectively, in 3Q15. AVY’s cash and cash equivalents and inventories rose 31.7% and 10.3%, respectively, between 3Q15 and 3Q16. Its current ratio fell to 1.0x, and its debt-to-equity ratio rose to 3.4x in 3Q16, compared to 1.3x and 3.0x, respectively, in 3Q15.

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Quarterly dividend

Avery Dennison has declared a quarterly cash dividend of $0.41 per share on its common stock. The dividend will be paid on December 21, 2016, to shareholders of record as of December 7, 2016.

Projections

Avery Dennison projects EPS in the range of $3.50–$3.55 for 2016. It also expects adjusted EPS in the range of $3.95–$4.00, which excludes $0.15 per share for restructuring charges and other items and $0.30 per share for non-cash charges to settle US pension obligations for 2016.

Now, let’s take a look at Constellation Brands (STZ).

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