Core Viewpoint - Investors in the Containers - Paper and Packaging sector should consider Amcor (AMCR) and Avery Dennison (AVY) for potential value investment opportunities [1] Group 1: Zacks Rank and Earnings Estimates - Amcor has a Zacks Rank of 2 (Buy), indicating strong earnings estimate revision trends, while Avery Dennison has a Zacks Rank of 4 (Sell) [3] - The earnings estimate revision activity for AMCR is more impressive, suggesting a better analyst outlook compared to AVY [3] Group 2: Value Metrics - Amcor's forward P/E ratio is 11.41, significantly lower than Avery Dennison's forward P/E of 18.95 [5] - Amcor has a PEG ratio of 2.29, while Avery Dennison's PEG ratio is 2.90, indicating that AMCR may be more attractive in terms of expected earnings growth [5] - Amcor's P/B ratio is 3.55, compared to Avery Dennison's P/B of 6.52, further highlighting AMCR's relative undervaluation [6] - Based on these valuation metrics, Amcor holds a Value grade of B, while Avery Dennison has a Value grade of C, suggesting that AMCR is the more favorable option for value investors [6]

Company Overview - Avery Dennison has faced challenges recently, leading to a downgrade from 'buy' to 'hold' in March of the previous year due to performance concerns [1] Industry Insights - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and the potential for value and growth in these sectors [1]

Core Viewpoint - Avery Dennison Corporation (AVY) is experiencing growth driven by productivity improvements and cost-saving measures, supported by strong demand for consumer-packaged goods and e-commerce trends [1][3][4] Group 1: Financial Performance and Growth Drivers - Approximately 40% of Avery Dennison's revenues come from labeling non-durable consumer goods, with strong demand in this sector [3] - The company expects over 15% growth for its Intelligent Labels in 2025, reflecting a robust long-term outlook [8] - The Materials Group segment is benefiting from productivity improvements and higher volume, which are expected to continue boosting margins [6][5] Group 2: Strategic Initiatives - Avery Dennison is focusing on five key priorities: driving growth in high-value product categories, enhancing profitability in base businesses, pursuing productivity improvements, maintaining disciplined capital management, and leading with environmentally responsible practices [7] - The company is executing long-term restructuring initiatives to enhance growth in its base business while reallocating resources to high-value categories [8][9] Group 3: Challenges and Concerns - The company is facing higher raw material costs, particularly in paper and energy, which are expected to impact margins [2][10] - Supply chain challenges and currency translation issues are anticipated to affect top-line growth [11] - Avery Dennison's adjusted EPS for the second quarter of 2025 is projected to be between $2.30 and $2.50, indicating a year-over-year decline at the mid-point [11] Group 4: Stock Performance - AVY shares have declined by 19.7% over the past year, compared to a 7.6% decline in the industry [12]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.30, up 4% excluding currency translation compared to the prior year [24] - Sales increased by 2% on an organic basis, driven by higher volume but partially offset by deflation-related price reductions [25] - Adjusted EBITDA margin was strong at 16.4%, up 10 basis points compared to the prior year [25] - Free cash flow was approximately negative $50 million, consistent with historical trends for Q1 [26] - The net debt to adjusted EBITDA ratio at quarter-end was 2.3%, following the repayment of €500 million of debt [26] Business Line Data and Key Metrics Changes - Materials Group sales were up 1% on an organic basis, driven by low single-digit volume and mix growth, while high-value categories saw high single-digit growth [28] - Solutions Group sales increased by 5% on an organic basis, with base solutions up high single digits and high-value solutions up low single digits [33][35] - Overall label materials volume was in line with expectations, with North America showing low single-digit growth and Europe down low single digits [30] Market Data and Key Metrics Changes - North America volume was up low single digits, while Europe experienced a slight decline due to a strong prior year [30] - Asia Pacific and Latin America both saw low single-digit growth compared to the prior year [30] - Apparel growth was strong, up mid-single digits, but expected to decline mid-single digits in Q2 due to tariff impacts [9][41] Company Strategy and Development Direction - The company is focused on expanding its position in high-value categories, which now make up more than a third of Materials Group sales [6] - There is a strategic collaboration with Kroger to enhance inventory management in the food sector, with ongoing large-scale grocery pilots [12] - The company continues to invest in capturing significant opportunities in intelligent labels and RFID technology, positioning itself as a market leader [15][22] Management's Comments on Operating Environment and Future Outlook - Management noted elevated macro uncertainty due to changing trade policies and a reduced global GDP growth outlook [16] - The company is prepared for a lower volume environment and has initiated scenario planning to maximize opportunities [19] - For Q2 2025, adjusted earnings per share are expected to be in the range of $2.30 to $2.50, with overall sales growth anticipated to be roughly comparable to the prior year [40] Other Important Information - The company returned $331 million to shareholders through share repurchases and dividends in the first quarter, reducing share count by 2.3% [27] - The company has a strong balance sheet with ample capacity for capital allocation, providing flexibility for future investments [22] Q&A Session Summary Question: Impact of tariff prebuying on Q1 results - Management indicated that there was no significant pull forward due to tariffs in Q1, but some muted demand was observed in late March [50][51] Question: Working capital increase in Q1 - The increase in working capital was attributed to higher incentive compensation payments and customer rebate payments, rather than specific repositioning for tariffs [66] Question: Apparel demand change from positive to negative - The shift in apparel demand is primarily related to tariff issues, particularly concerning sourcing from China [73] Question: Share buyback strategy amid uncertainty - The company increased share buybacks due to confidence in intrinsic value, despite the recent tariff uncertainties impacting the outlook [78] Question: Logistics and supply chain capacity - The company has a robust network to support customers moving sourcing from China to other countries, with ample capacity to manage increased demand [87] Question: Raw material cost impacts - Management expects limited tariff impacts on raw materials, with a stable outlook for the raw material basket despite some inflationary pressures [115][125]

Core Insights - Avery Dennison Corporation (AVY) reported adjusted earnings of $2.30 per share for Q1 2025, slightly missing the Zacks Consensus Estimate of $2.32, but showing a 0.4% year-over-year improvement [1] - Total revenues decreased by 0.1% year over year to $2.148 billion, falling short of the Zacks Consensus Estimate of $2.151 billion [2] Financial Performance - The cost of sales increased by 0.5% year over year to $1.53 billion, while gross profit fell by 1.7% to $621.5 million [2] - Marketing, general, and administrative expenses were reduced to $347 million from $365 million in the previous year, with adjusted operating profit slightly increasing to $274.5 million from $273.7 million [3] - The adjusted operating margin improved to 12.8% from 12.7% year over year [3] Segment Performance - Revenues in the Materials Group segment declined by 1.1% year over year to $1.48 billion, missing the estimate of $1.49 billion, although organic sales increased by 1.2% [4] - The Solutions Group saw a revenue increase of 2% year over year to $668 million, surpassing the estimated $655 million, with organic sales improving by 4.9% [5] Cash and Debt Position - The company returned $331 million to shareholders through share repurchases and dividends in Q1 2025, repurchasing 1.4 million shares [6] - Cash and cash equivalents at the end of the quarter were $196 million, up from $186 million a year ago, while long-term debt rose to $2.58 billion from $2.07 billion [7] - The company achieved approximately $14 million in pre-tax savings from restructuring, incurring pre-tax restructuring charges of around $5 million [7] Guidance - For Q2 2025, the company expects adjusted EPS to be between $2.30 and $2.50 [8] Stock Performance - AVY shares have decreased by 15.9% over the past year, contrasting with the industry's growth of 20.7% [9]

Core Insights - Avery Dennison reported $2.15 billion in revenue for Q1 2025, reflecting a year-over-year decline of 0.1% and an EPS of $2.30, slightly up from $2.29 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by -0.11%, while the EPS also missed the consensus estimate by -0.86% [1] Financial Performance Metrics - Net Sales for the Solutions Group reached $668.20 million, exceeding the average estimate of $665.75 million, marking a year-over-year increase of +2.1% [4] - Net Sales for the Materials Group totaled $1.48 billion, slightly above the average estimate of $1.47 billion, but showed a year-over-year decline of -1.1% [4] - Adjusted Operating Income for the Materials Group was $230.30 million, slightly below the average estimate of $230.80 million [4] - Adjusted Operating Income for Corporate expenses was reported at -$24 million, better than the average estimate of -$25.52 million [4] - Adjusted Operating Income for the Solutions Group was $68.20 million, surpassing the average estimate of $62.56 million [4] Stock Performance - Avery Dennison's shares have returned -0.5% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Avery Dennison reported quarterly earnings of $2.30 per share, missing the Zacks Consensus Estimate of $2.32 per share, representing an earnings surprise of -0.86% [1] - The company posted revenues of $2.15 billion for the quarter, also missing the Zacks Consensus Estimate by 0.11%, with year-ago revenues remaining the same at $2.15 billion [2] - Over the last four quarters, Avery Dennison has surpassed consensus EPS estimates three times and topped revenue estimates only once [2] Stock Movement and Outlook - Avery Dennison shares have declined approximately 6.6% since the beginning of the year, while the S&P 500 has decreased by 10.1% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.55 on revenues of $2.25 billion, and for the current fiscal year, it is $9.87 on revenues of $8.9 billion [7] Industry Context - The Containers - Paper and Packaging industry, to which Avery Dennison belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Avery Dennison's stock may be influenced by the overall outlook for the industry [8]

Financial Performance - Reported EPS for Q1 2025 was $2.09, with adjusted EPS of $2.30, reflecting a 0.4% increase and approximately 4% increase excluding currency effects[5]. - Net sales for Q1 2025 totaled $2.1 billion, a slight decrease of 0.1%, while organic sales increased by 2.3%[5]. - Net income for the three months ended March 29, 2025, was $166.3 million, down from $172.4 million in the same period last year, representing a decrease of 6.0%[29]. - Adjusted net income for the first quarter of 2025 was $182.6 million, down from $185.1 million in the first quarter of 2024, a decrease of 0.7%[49]. - The company’s adjusted net income per common share for the first quarter of 2025 was $2.30, compared to $2.29 in the same period last year, reflecting a slight increase of 0.4%[53]. Sales and Revenue Breakdown - The Materials Group reported sales of $1.5 billion, down 1.1%, but organic sales increased by 1.2%[8]. - The Solutions Group achieved reported sales of $668 million, up 2.0%, with organic sales growth of 4.9%[8]. - Total net sales for the first quarter of 2025 were $2,148.3 million, a slight decrease of 0.2% compared to $2,151.3 million in the first quarter of 2024[57]. - The reported net sales change for the total company in Q1 2025 was a slight decline of 0.1%, with the Materials Group experiencing a decrease of 1.1% and the Solutions Group showing an increase of 2.0%[63]. - Organic sales change (non-GAAP) for the total company in Q1 2025 was 2.3%, with the Materials Group at 1.2% and the Solutions Group at 4.9%[63]. Operating Performance - Adjusted operating income for the first quarter of 2025 was $274.5 million, compared to $273.7 million in the first quarter of 2024, indicating a slight increase of 0.3%[48]. - Adjusted operating income for the Materials Group in Q1 2025 was $230.3 million, down from $240.5 million in Q1 2024, reflecting a decrease of 4.9%[58]. - Adjusted EBITDA for the first quarter of 2025 was $352.4 million, up from $351.0 million in the first quarter of 2024, reflecting a growth of 0.4%[48]. - Adjusted EBITDA for the Solutions Group increased to $114.6 million in Q1 2025, compared to $105.4 million in Q1 2024, representing an increase of 10.8%[59]. - Adjusted EBITDA for the total company in Q1 2025 was $352.4 million, a decrease from $367.4 million in Q2 2024[61]. Shareholder Returns and Financial Position - The company returned $331 million to shareholders through share repurchases and dividends, repurchasing 1.4 million shares at a cost of $262 million[9]. - The net debt to adjusted EBITDA ratio was 2.3x at the end of Q1 2025, indicating a strong balance sheet[10]. - Total debt as of Q1 2025 was $3,459.1 million, with net debt standing at $3,263.2 million after accounting for cash and cash equivalents of $195.9 million[61]. - The net debt to adjusted EBITDA ratio for the last twelve months (LTM) was 2.3, indicating a stable leverage position[61]. Guidance and Future Outlook - The company expects Q2 2025 reported EPS guidance to be between $2.25 and $2.45, with adjusted EPS guidance of $2.30 to $2.50[5][13]. - Approximately $14 million in pre-tax savings were realized from restructuring actions during Q1 2025[12]. - The company plans to continue focusing on market expansion and new product development to drive future growth[60]. Tax and Cash Flow - The effective tax rate for Q1 2025 was reported at 26.7%, with an adjusted tax rate of 26.0%[11]. - Cash and cash equivalents at the end of the period were $195.9 million, an increase from $185.7 million at the end of the previous year[30]. - The company reported a net cash used in operating activities of $(16.3) million for the first quarter of 2025, compared to $119.8 million provided in the same period of 2024[55]. Current Assets and Liabilities - Total current assets increased to $3,030.4 million in 2025 from $2,886.8 million in 2024, reflecting a growth of 4.9%[27]. - Total current liabilities decreased to $2,952.8 million in 2025 from $3,308.2 million in 2024, a reduction of 10.7%[27].

Core Viewpoint - Avery Dennison Corporation (AVY) is expected to report first-quarter 2025 results on April 23, 2025, with a revenue estimate of $2.14 billion, reflecting a 0.4% decrease year-over-year, while earnings per share (EPS) is estimated at $2.32, indicating a 1.3% growth year-over-year [1]. Revenue and Earnings Estimates - The consensus estimate for AVY's first-quarter revenues is $2.14 billion, down 0.4% from the previous year [1]. - The earnings estimate for the first quarter is $2.32 per share, showing a year-over-year growth of 1.3% [1]. - The earnings estimates have been revised downwards over the past 60 days, with a current estimate of $2.32 compared to $2.33 from 7 days ago [1][6]. Earnings Surprise History - Avery Dennison has consistently beaten the Zacks Consensus Estimates in the last four quarters, with an average surprise of 3.7% [2]. - The reported earnings for the last four quarters were $2.38, $2.33, $2.42, and $2.29, with respective surprises of 0.42%, 0.43%, 7.56%, and 6.51% [3]. Segment Performance Expectations - The Materials Group segment is expected to see revenues dip by 0.6% year-over-year to $1.48 billion, with an adjusted operating profit forecasted at $263 million, reflecting a 4.5% year-over-year improvement [8]. - The Solutions Group segment is projected to generate revenues of $655 million, a slight increase of 0.1% from the prior year, with an operating profit estimate of $57 million, indicating a 0.8% increase year-over-year [9][10]. - Factors influencing performance include improved volumes in both segments, but higher costs for raw materials, labor, and freight are expected to impact margins [7]. Stock Performance - Avery Dennison's stock has decreased by 18.3% over the past year, compared to a 22.5% decline in the industry [11].

Company Performance - Avery Dennison Corporation (NYSE: AVY) reported a 19% growth in EPS for 2024, indicating a strong recovery from the destocking period that negatively impacted its bottom line [1] - The company is transitioning towards higher-value products, which may enhance its future profitability and market position [1] Investment Insights - The article highlights the investment strategies of Robert F. Abbott, who has been managing investments since 1995 and has incorporated options trading since 2010, suggesting a focus on risk management and income generation through covered calls and collars [1]