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Avery Dennison (AVY) to Report Q4 Earnings: What's in Store?

Zacks Equity Research
·5-min read

Avery Dennison Corporation AVY is scheduled to report fourth-quarter 2021 results before the opening bell on Feb 2.

Q4 Estimates

The Zacks Consensus Estimate for the fourth-quarter total sales is pegged at $2.14 billion, suggesting an improvement of 7.5% from the prior-year quarter’s figure. The consensus mark for the company’s earnings per share is pinned at $2.15, indicating a year-over-year decline of 5.3%. The estimate has been unchanged in the past 30 days.

Q3 Performance

In the last reported quarter, Avery Dennison reported year-over-year improvements in the top and the bottom line. Earnings and revenues surpassed the respective Zacks Consensus Estimate. The company has a trailing four-quarter average earnings surprise of 9.02%.

Factors at Play

Avery Dennison is witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products in response to the pandemic. This is likely to get reflected in the company’s fourth-quarter sales results, as around 40% of its revenues come from these products. Focus on acquisitions and growth in high-value product categories are likely to have contributed to the company’s performance during the December-end quarter.

The Zacks Consensus Estimate for the Label and Graphic Materials segment’s fourth-quarter sales is currently pegged at $1,344 million, calling for a year-over-year improvement of 3.8%. The segment’s Label and Packaging Materials business serves essential categories that are seeing higher demand amid the pandemic. Strong demand for consumer-packaged goods and e-commerce trends are likely to have aided the business during the quarter. Volume improvement, focus on high-value categories led by specialty labels and productivity initiatives, is anticipated to have buoyed the segment’s sales during the quarter under review. The Zacks Consensus Estimate for the segment’s operating income is pegged at $183 million, suggesting a year-over-year decline of 11.2%.

The Zacks Consensus Estimate for the Industrial and Healthcare Materials segment’s quarterly sales is pinned at $189 million compared to the prior-year quarter’s $188 million. The rebound in demand for industrial products is likely to have translated into improved order levels in the quarter to be reported. The Zacks Consensus Estimate for the segment’s operating income is pegged at $18.4 million, indicating a decline of 21% from the prior-year quarter’s number. The segment’s operating profit is likely to have been impacted by cost inflation.

The Zacks Consensus Estimate for the Retail Branding and Information Solutions segment’s October-December quarter sales is pegged at $598 million, calling for an increase of 18% from the prior-year quarter's figure of $508 million. Consistent strength in Radio-frequency identification, investments in digital identification technologies and external embellishments are likely to have boosted the segment’s fourth-quarter sales. The Zacks Consensus Estimate for the segment’s operating income is pegged at $85 million compared with the prior-year quarter’s $78 million.

Avery Dennison is executing various long-term productivity and temporary cost-saving actions amid the coronavirus pandemic. This is likely to have boosted the segment’s margins and earnings performance during the quarter in the discussion. Nevertheless, supply-chain-related challenges, unfavorable impacts of foreign currency translation and rising raw material, labor and freight costs might have offset these benefits during the fourth quarter.

Avery Dennison Corporation Price and EPS Surprise

Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote

What the Zacks Model Indicates

Our proven model does not conclusively predict an earnings beat for Avery Dennison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Avery Dennison has an Earnings ESP of 0.00%.

Zacks Rank: Avery Dennison currently carries a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Avery Dennison’s shares have gained 31.8% in the past year compared with the industry’s growth of 26.3%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Stocks Worth a Look

Here are some Industrial Products stocks worth considering as these have the right combination of elements to post an earnings beat in their upcoming releases:

W.W. Grainger, Inc. GWW currently has an Earnings ESP of +2.29% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2021 earnings has moved up 0.2% in the past 30 days to $5.25 per share, suggesting year-over-year growth of 43.4%.

The Zacks Consensus Estimate for quarterly revenues is pegged at $3.2 billion, indicating an increase of 11.3% from the prior-year quarter’s levels. Grainger has a long-term earnings growth rate of 13%.

AGCO Corporation AGCO currently has an Earnings ESP of +13.66% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2021 earnings is currently pegged at $1.72 per share, suggesting 11.7% growth from the year-ago quarter’s tally.

The Zacks Consensus Estimate for quarterly revenues is pinned at $3.04 billion, highlighting year-over-year growth of 11.9%. AGCO Corporation has a trailing four-quarter earnings surprise of 47.5%, on average. It has a long-term earnings growth of 19.1%.

AptarGroup, Inc. ATR currently has an Earnings ESP of +0.36% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2021 earnings have been stable in the past 30 days and is currently pegged at 92 cents per share.

The Zacks Consensus Estimate for AptarGroup’s quarterly revenues is pegged at $801 million, which indicates a year-over-year improvement of 6.9%. ATR has a trailing four-quarter earnings surprise of 4.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Avery Dennison Corporation (AVY) : Free Stock Analysis Report

AGCO Corporation (AGCO) : Free Stock Analysis Report

W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report

AptarGroup, Inc. (ATR) : Free Stock Analysis Report

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