Investment Research report

Avery Dennison Corp.

NYSE:
AVY
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Avery Dennison Corp.
Under Pressure and Sensitive to Declining Results
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Research Overview

INDEX:
S&P 500
Sector:
Materials
Position:
Short
Date:
Nov 10, 2020

After conducting a forensic financial and accounting review, Spruce Point believes Avery Dennison Corp. (NYSE: AVY), an S&P 500 company known for its products and solutions in pressure sensitive labels, adhesives, reflective materials and tapes, and retail branding and information solutions, has had organic financial conditions that have been inflecting negative for years as its core product loses share to competing technologies and changes in consumer packaging preferences. Based on our investigation, we estimate 35% to 55% downside risk to under $68 - $99 per share.

The report highlights several key concerns with the company, including:

  • We believe that Avery’s organic financial condition has been inflecting negative for years as its core product loses share to competing technologies and changes in consumer preferences
  • We find that the Company is showing multiple classic signs of increasing financial strain
  • AVY consistently repeats and expands restructuring programsand the restructuring charge accounts don’t add up
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