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Avery Dennison Reaffirms Long-Term Targets at Investor Day 2024
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Avery Dennison Corporation (AVY - Free Report) hosted its 2024 Investor Day on Wednesday. Let's discuss the key takeaways from the event. AVY’s shares gained 3.1% after the company stated that it is on track to meet its 2020-2025 long-term targets of more than 5% sales growth, adjusted EBITDA margin of more than 16% and around 10% adjusted EPS growth.
Avery Dennison Adjusts Intelligent Labels’ Outlook
Avery Dennison expects its Materials segment to be driven by several key factors. Attractive packaging will drive sales, while e-commerce expansion will increase demand for labels. The company’s innovative "intelligent labels" will enhance supply chain transparency, contributing to overall growth.
AVY expects Intelligent Labels’ business growth rate to be 15%. This has been lowered from the prior-announced 15% to 20%, which is more consistent with the growth profile in 2023 and 2024’s estimates. The downside was due to destocking impacts in apparel and a lower-demand outlook from logistics customers. The company estimates that the long-term growth will be driven by Apparel/Logistics as well as Food/Other.
AVY Targets More Than 17% EBITDA by 2028
The company targets more than 5% sales growth (ex-currency) in the long term. It expects more than 17% adjusted EBITDA margin by 2028 and around 10% adjusted EPS in long-term growth. Avery Dennison aims to have the top quartile ROTC among its peers in the long term.
The company remains focused on acquisition prospects that can expedite its business plan and grow AVY’s mix of high-value categories.
Avery Dennison Plans to Solidify Capital Allocation
AVY plans to have around $8 billion in capital available in the next five years to grow organically and contribute to M&A.
The company plans to use 50-55% of its capital for share repurchases and M&A and around 20% to expand dividends. It will spend around 25-30% on capital expenditure and restructuring.
The company returned $177 million in cash to its shareholders through share repurchases and dividend payments in the first half of 2024. AVY repurchased 0.2 million shares throughout the first half.
Avery Dennison ended the second quarter with cash and cash equivalents of $209 million compared with $217 million at the end of 2023. The company’s long-term debt was $2.05 billion at the end of the quarter under review, which was down from $2.91 billion at the end of the second quarter of 2023.
AVY’s Fiscal 2024 Guidance Suggests 19% Growth
The company delivered adjusted earnings of $2.42 per share in second-quarter 2024, delivering 26% year-over-year growth. Total revenues grew 6.9% year over year to $2.24 billion.
Backed by a better-than-expected performance in the second quarter, the company updated its yearly outlook. Avery Dennison projects full-year adjusted EPS of $9.30-$9.50 compared with the prior-stated $9-$9.50. The mid-point of the updated range indicates year-over-year growth of 19%.
The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR’s shares have gained 75.2% in a year.
Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’ 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for 2024 earnings has moved north by 4% in the past 60 days. The company’s shares have gained 27.5% in a year.
The Zacks Consensus Estimate for Cintas’ 2024 earnings is pegged at $16.64 per share. The consensus estimate for 2024 earnings has moved north by 1% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 4%. CTAS’ shares have gained 60.4% in a year.
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Avery Dennison Corporation (AVY - Free Report) hosted its 2024 Investor Day on Wednesday. Let's discuss the key takeaways from the event. AVY’s shares gained 3.1% after the company stated that it is on track to meet its 2020-2025 long-term targets of more than 5% sales growth, adjusted EBITDA margin of more than 16% and around 10% adjusted EPS growth.
Avery Dennison Adjusts Intelligent Labels’ Outlook
Avery Dennison expects its Materials segment to be driven by several key factors. Attractive packaging will drive sales, while e-commerce expansion will increase demand for labels. The company’s innovative "intelligent labels" will enhance supply chain transparency, contributing to overall growth.
AVY expects Intelligent Labels’ business growth rate to be 15%. This has been lowered from the prior-announced 15% to 20%, which is more consistent with the growth profile in 2023 and 2024’s estimates. The downside was due to destocking impacts in apparel and a lower-demand outlook from logistics customers. The company estimates that the long-term growth will be driven by Apparel/Logistics as well as Food/Other.
AVY Targets More Than 17% EBITDA by 2028
The company targets more than 5% sales growth (ex-currency) in the long term. It expects more than 17% adjusted EBITDA margin by 2028 and around 10% adjusted EPS in long-term growth. Avery Dennison aims to have the top quartile ROTC among its peers in the long term.
The company remains focused on acquisition prospects that can expedite its business plan and grow AVY’s mix of high-value categories.
Avery Dennison Plans to Solidify Capital Allocation
AVY plans to have around $8 billion in capital available in the next five years to grow organically and contribute to M&A.
The company plans to use 50-55% of its capital for share repurchases and M&A and around 20% to expand dividends. It will spend around 25-30% on capital expenditure and restructuring.
The company returned $177 million in cash to its shareholders through share repurchases and dividend payments in the first half of 2024. AVY repurchased 0.2 million shares throughout the first half.
Avery Dennison ended the second quarter with cash and cash equivalents of $209 million compared with $217 million at the end of 2023. The company’s long-term debt was $2.05 billion at the end of the quarter under review, which was down from $2.91 billion at the end of the second quarter of 2023.
AVY’s Fiscal 2024 Guidance Suggests 19% Growth
The company delivered adjusted earnings of $2.42 per share in second-quarter 2024, delivering 26% year-over-year growth. Total revenues grew 6.9% year over year to $2.24 billion.
Backed by a better-than-expected performance in the second quarter, the company updated its yearly outlook. Avery Dennison projects full-year adjusted EPS of $9.30-$9.50 compared with the prior-stated $9-$9.50. The mid-point of the updated range indicates year-over-year growth of 19%.
Avery Dennison Share Price Outperforms Industry’s Growth
AVY shares have gained 21.8% in the past year compared with the industry’s growth of 19.3%.
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AVY’s Zacks Rank & Other Stocks to Consider
Avery Dennison currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Crane Company (CR - Free Report) , Flowserve Corporation (FLS - Free Report) and Cintas Corporation (CTAS - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR’s shares have gained 75.2% in a year.
Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’ 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for 2024 earnings has moved north by 4% in the past 60 days. The company’s shares have gained 27.5% in a year.
The Zacks Consensus Estimate for Cintas’ 2024 earnings is pegged at $16.64 per share. The consensus estimate for 2024 earnings has moved north by 1% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 4%. CTAS’ shares have gained 60.4% in a year.