GET DAILY SIGNALSAvery Dennison (AVY) Delivers +2.1% EPS Growth in Q3 2026
Key Takeaways
- Avery Dennison reported third-quarter 2026 adjusted earnings per share (EPS) of $2.42, up 2.1% from $2.37 a year earlier and above Wall Street consensus estimates.
- Net sales rose 5.2% year over year to $2.33 billion, exceeding analyst expectations, with organic sales up 3.7%.
- Management narrowed and slightly raised its full-year 2026 adjusted EPS guidance to a range of $10.10 to $10.24, lifting the midpoint.
- Adjusted EBITDA rose to $367.7 million, though the margin eased to 15.8% from 16.5%.
- Adjusted free cash flow remained robust at $246 million for the quarter and $715.8 million year-to-date.
Understanding the Earnings Context
Avery Dennison, a global materials science and digital identification solutions leader, serves industries ranging from packaging and labeling to apparel and logistics. Its quarterly results offer investors a broad read on industrial demand and consumer-driven supply chains. Heading into the report, the focus was on how customer inventory destocking and cost inflation would weigh on growth. The company had signaled that pre-buy inventory built up earlier in 2026 would unwind through year-end, creating a temporary drag. Against that backdrop, the third quarter was a test of whether productivity initiatives, pricing actions, and demand in high-value categories could offset these headwinds while keeping the balance sheet and cash generation strong. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
For the third quarter of 2026, Avery Dennison reported adjusted EPS of $2.42, up 2.1% from $2.37 in the prior-year period and ahead of consensus estimates of roughly $2.32. On a GAAP basis, reported EPS was $2.24, compared with $2.13 a year earlier.
Net sales rose 5.2% year over year to $2.33 billion, exceeding analysts' expectations of about $2.27 billion. Organic sales increased 3.7%, reflecting low-single-digit pricing to offset raw material cost inflation and modest volume and mix growth, plus a contribution from the Taylor Adhesives acquisition.
By segment, Materials Group sales climbed 8.5% to $1.64 billion, with organic growth of 4.9%. Solutions Group sales declined 1.8% to $687 million, though organic sales edged up 0.8%. Adjusted EBITDA was $367.7 million, and the adjusted EBITDA margin contracted to 15.8% from 16.5% a year earlier, as productivity gains were partly offset by pricing pass-throughs and higher employee-related costs.
For the full year, management narrowed its adjusted EPS guidance to $10.10 to $10.24, slightly raising the midpoint to approximately $10.17, and reaffirmed expectations for roughly 5.5% reported sales growth and 3.5% organic growth.
Market Reaction and Investor Sentiment
Shares were little changed in the immediate aftermath of the report, reflecting a print that beat on both revenue and earnings but arrived with a familiar caveat: the ongoing unwind of customer inventory remained a drag on headline results. Investors appeared to weigh the stronger-than-expected organic sales and raised guidance midpoint against softer margins and the lingering destocking dynamic. The market's measured response suggests sentiment was already positioned for a solid quarter, and the confirmation of an improving underlying growth trend—management estimated roughly 6% organic sales growth and 8% adjusted EPS growth excluding inventory effects—was viewed as a stabilizing signal rather than a catalyst for a sharp repricing.
Forward Outlook and Key Factors to Monitor
Looking ahead, the key variable is the pace of inventory normalization. Management expects the vast majority of remaining customer destocking to conclude by the end of the fourth quarter, which would remove a meaningful headwind entering 2027. Investors should watch whether this timeline holds and how quickly organic sales growth re-accelerates once the unwind is complete.
Margin recovery is another area to monitor. Higher raw material costs and wage inflation are being managed through pricing and productivity, but the adjusted EBITDA margin has compressed year over year. Progress on restructuring savings—now expected to exceed $65 million—and continued margin expansion in the Solutions Group will be important indicators of profitability trajectory.
Finally, capital allocation remains a focus. With adjusted free cash flow conversion above 100% of net income, a strong balance sheet, and a growing dividend, the company has flexibility to invest in high-value opportunities and return cash to shareholders. Watch for updates on Intelligent Labels adoption across apparel, food, and logistics, as well as any signals on demand in base packaging categories heading into the new fiscal year.
Exploring AI Tools for Stock Analysis
In my analysis of names like AVY, I often turn to Tickeron’s AI-powered tools to cross-check technical patterns and peer comparisons. One resource I find particularly useful is the AI Screener, which lets me filter stocks by fundamentals, volatility, and custom criteria to spot broader sector trends more efficiently. It has helped refine my view on how industrial names are performing relative to the market without replacing my own fundamental work.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AVY in upward trend: price rose above 50-day moving average on October 15, 2026
AVY moved above its 50-day moving average on October 15, 2026 date and that indicates a change from a downward trend to an upward trend. In 27 of 51 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 53%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 14, 2026. You may want to consider a long position or call options on AVY as a result. In 48 of 95 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 51%.
The Moving Average Convergence Divergence (MACD) for AVY just turned positive on October 14, 2026. Looking at past instances where AVY's MACD turned positive, the stock continued to rise in 24 of 46 cases over the following month. The odds of a continued upward trend are 52%.
The 10-day moving average for AVY crossed bullishly above the 50-day moving average on October 22, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 7 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 47%.
Following a +0.84% 3-day Advance, the price is estimated to grow further. Considering data from situations where AVY advanced for three days, in 141 of 301 cases, the price rose further within the following month. The odds of a continued upward trend are 47%.
Bearish Trend Analysis
The 10-day RSI Indicator for AVY moved out of overbought territory on October 27, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 26 similar instances where the indicator moved out of overbought territory. In 13 of the 26 cases, the stock moved lower in the following days. This puts the odds of a move lower at 50%.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 35 of 61 cases where AVY's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 57%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AVY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
AVY broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for AVY entered a downward trend on October 14, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 32 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 38 (best 1 - 100 worst), indicating steady price growth. AVY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 47 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 80 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: AVY's P/B Ratio (5.945) is slightly higher than the industry average of (1.372). P/E Ratio (19.871) is within average values for comparable stocks, (16.521). Projected Growth (PEG Ratio) (1.922) is also within normal values, averaging (1.023). Dividend Yield (0.022) settles around the average of (0.032) among similar stocks. P/S Ratio (1.438) is also within normal values, averaging (1.259).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AVY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock worse than average.
Industry description
Market Cap
High and low price notable news
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a manufacturer of self-adhesive materials, retail tags, specialty tapes and polymers
Industry ContainersPackaging
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