AVY
Avery Dennison Corp.
Industrial/Transportation, Consumer
10/28/2019
Presented
| Date | 10/17/2019 |
| Price | $115.35 |
| Market Cap | $9.71B |
| Ent Value | $11.78B |
| P/E Ratio | 42.01x |
| Book Value | $12.62 |
| Div Yield | 2.01% |
| Shares O/S | 84.19M |
| Ave Daily Vol | 465,370 |
| Short Int | 1.83% |
Current
| Price | $219.88 |
| Market Cap | $17.70B |
| Avery Dennison Corp. engages in the provision of labeling and packaging materials and solutions. Its businesses include the production of pressure-sensitive materials and a variety of tickets, tags, labels, and other converted products. The company operates through the following business segments: Label & Graphic Materials, Retail Branding & Information Solutions, and Industrial & Healthcare Materials. The Label and Graphic Materials Segment manufactures and sells Fasson, JAC, and Avery Dennison-brand pressure-sensitive label and packaging materials, Avery Dennison and Mactac brand graphics, and Avery Dennison brand reflective products. The Retail Branding and Information Solutions segment designs, manufactures, and sells a variety of branding and information solutions to retailers, brand owners, apparel manufacturers, distributors and industrial customers. The Industrial and Healthcare Materials Segment manufactures and sells Fasson-brand and Avery Dennison-brand tapes and fasteners, Vancive -brand medical pressure sensitive adhesive based materials and products, and performance polymers. Avery Dennison was founded by R. Stanton Avery in 1935 and is headquartered in Glendale, CA. |
Publicly traded companies mentioned herein: Avery Dennison Corp (AVY), Delta Air Lines Inc (DAL), LVMH Moet Hennessy Louis Vuitton SE (MC FP)
Highlights
The presenter is long shares of Avery Dennison Corp (AVY), the Glendale, CA based company best known for its pressure-sensitive adhesive labels. This core business segment, which accounts for ~70% of the company’s revenue, provides labels for CPG products (e.g., shampoo bottles), industrial equipment, and logistics and shipping. While she considers this segment high-quality, she is more interested in the Retail Branding and Information Solutions (RBIS) side of AVY. This segment (~30% of revenue) is the global leader in tags and labels for the retail apparel industry, and the presenter believes there is major growth potential stemming from the implementation of radio-frequency identification (RFID) technology. She sees 40%+ upside and minimal downside to AVY’s current ~$115 share price based on a 2021 P/E multiple of 16x – 17x, mid-teens% EPS growth, and conservative topline growth assumptions.
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