Avery Dennison Earns an Upgrade at BofA Securities

BofA Securities analysts upgraded Avery Dennison (NYSE:AVY) to Buy from Underperform, raising the price target on the stock to $250 from $207. The decision reflects growing optimism about market conditions and the company's positioning, particularly within e-commerce and packaging markets.

Avery Dennison shares had underperformed the market by approximately 15% year-to-date. However, the analysts noted signs of improvement in box markets, alongside an enhanced outlook for e-commerce, which could drive higher demand for Avery’s label and packaging materials. This trend aligns with a broader Bank of America report projecting positive impacts on corrugated shipments and Avery’s label-related business lines.

The bank emphasized that Avery Dennison's diverse product portfolio, particularly in its value-added pressure-sensitive materials, provides a competitive edge over some European peers facing headwinds. The analysts also highlighted the firm’s forecast for strong Economic Value Added (EVA) and Return on Invested Capital (ROIC) in the coming years, suggesting sustained financial health and growth potential.

Concerns among investors surfaced following a preannouncement of weaker results by a European competitor. However, Avery Dennison’s recent analyst day reassured investors with a cautious yet strategic outlook for its Materials segment, reinforcing BofA’s upgraded outlook and supporting confidence in Avery’s robust market positioning as demand recovers.