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Investing.com - UBS upgraded Avery Dennison (NYSE:AVY) from Neutral to Buy on Thursday, raising its price target to $218.00 from $181.00. According to InvestingPro data, the company maintains a "GOOD" financial health score and has been actively buying back shares, demonstrating management’s confidence in the business.
The investment firm cited expectations for accelerated RFID (radio-frequency identification) technology growth and adjusted earnings per share improvements beginning in 2026. UBS projects approximately 10% adjusted EPS growth in 2026, potentially increasing to 12% over the longer term. The company’s current P/E ratio of 20.01 reflects these growth expectations, while its impressive 55-year streak of maintaining dividend payments showcases long-term stability.
A key driver for the upgraded outlook is Walmart’s planned RFID expansion into bakery, meat, and deli sections, which UBS believes could boost Avery Dennison’s RFID sales by more than 10% over the next two years. Currently, about 70% of the company’s RFID sales come from apparel markets.
UBS noted that opportunities outside the apparel sector are nearly ten times larger than current markets. The firm expects retailers to refocus on efficiency and cost improvements as tariff disruptions subside, potentially expanding Avery Dennison’s backlog of new RFID deployments.
According to UBS, the market is currently pricing in minimal forward EPS growth compared to their projected 11% compound annual growth rate, suggesting the stock could see a 10% re-rating as growth and RFID trends accelerate. Get deeper insights into AVY’s valuation and growth potential with InvestingPro, which offers exclusive access to detailed financial analysis and 8 additional key ProTips for informed investment decisions.
In other recent news, Avery Dennison Corp reported strong financial results for the third quarter of 2025. The company exceeded earnings per share (EPS) expectations by reporting $2.37 against a forecast of $2.33. Revenue was in line with projections, maintaining a forecast of $2.22 billion. These results highlight Avery Dennison’s consistent performance and alignment with market expectations. Analysts and investors closely monitor such earnings reports as they provide insight into the company’s financial health and strategic execution. The company’s ability to meet revenue forecasts while surpassing EPS estimates is a positive signal for stakeholders. These developments are part of the recent updates concerning Avery Dennison’s financial performance.
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