Avery Dennison Corp (AVY.N): Encouraging Return to FY Guidance; Raising Est. on 2Q Outperformance

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Avery Dennison Corp (AVY.N): Encouraging Return to FY Guidance; Raising Est. on 2Q Outperformance

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30 Jul 2026 18:00:44 ET │ 13 pages

Avery Dennison Corp (AVY.N)

Encouraging Return to FY Guidance; Raising Est. on 2Q

Outperformance

CITI'S TAKE

Shares rose +4.6% (vs. Packaging -2.5%) following a sizable 2Q beat and Neutral

reinstated FY guidance following a withdrawal in April ’25. Organic revenue

growth surged +7.6% Y/Y, well ahead of VA cons. (+0.8%) even accounting Price (30 Jul 26 16:00) US$174.82

for the impact from pre-buy ahead of price increases (~50% of growth), as Target price US$186.00↑

high-value categories rose +MSD% in Materials and +LSD% in Solutions. IL

from US$184.00rose +LSD% Y/Y as +10% Y/Y growth in apparel was partially offset by a

decline in logistics. Momentum could continue into 2H as AVY pointed to “a Expected share price return 6.4%

much more meaningful contribution” from food partially driven by “a lot Expected dividend yield 2.3%

more activity in new customer programs.” Similar to previous RFID

Expected total return 8.7%deployments, WMT could become a catalyst for broader adoption as

suppliers adapt alongside the retailer. Conversely, there isn’t a firm start- Market Cap US$13,372M

date for WMT’s large-scale rollout ($70-$120mm opportunity at full

deployment); we forecast a modest benefit beginning in 4Q’26.

Model update – We’re raising our ’26 est. +$0.20 to $10.12 as 2Q outperformance Price Performance

more than offsets a lower 2H outlook. Pre-buying has driven a +$0.30 uplift to (RIC: AVY.N, BB: AVY US)

1H’26; we forecast -$0.25 unwind in 3Q and -$0.05 impact in 4Q. We forecast

3Q’26 EPS of $2.32; on a Q/Q basis, we model -$0.50 headwind from pre-buying

and -$0.10 headwind from normal seasonality. Despite strong 2Q results in