Avery Dennison: Stocking Up

Research evidence excerpt

Avery Dennison: Stocking Up

J P M O R G A N North America Equity Research

30 July 2026

Avery Dennison Overweight

AVY, AVY US

Stocking Up Price (30 Jul 26):$174.82

▲Price Target (Dec-27):$190.00

Prior (Dec-26):$185.00

Avery Dennison reported a strong 2Q:26 quarter, and issued annual EPS guidance

mid-year, which at the midpoint was above analyst estimates. The shares increased Chemicals: Specialty, Commodity,

Agricultural, and Paper & Packaging4.6% versus a market that was higher by 1.7%. The earnings strength stemmed in

part from inventory building by label customers in advance of two rounds of price Jeffrey J. Zekauskas AC

increases issued by Avery and its label competitors. Materials Group volumes were (1-212) 622-6644

jeffrey.zekauskas@jpmorgan.com

up almost 10% in the quarter. Accordingly, the volume strength of the second

quarter is likely to be succeeded by volume contraction in the third quarter as Silke Kueck

(1-212) 622-6503

customers work down their inventories. That said, the underlying label business is silke.x.kueck@jpmorgan.com

growing close to 3%, which is providing a solid earnings footing for the company

Katie Zhang

in 2026. We note that Avery’s price increases in the Materials segment should (1-212) 622-3262

neutralize high-single-digit raw material cost inflation. Intelligent labels grew katie.zhang@jpmchase.com

slowly in 1H:26, and demand growth will accelerate to a high-single-digit rate in Lydia Huang

the second half as volume from retail and new food customers picks up. We raised (1-212) 622-0086

our EPS forecast for Avery from $10.05 to $10.25 for 2026. We are establishing lydia.huang@jpmorgan.com

a December 2027 price target for Avery of $190, which reflects a 10.7x multiple J.P. Morgan Securities LLC