Avery Dennison approves $750M stock buyback

Published 28/04/2025, 11:50
Avery Dennison approves $750M stock buyback

In a recent 8K filing with the Securities and Exchange Commission, Avery Dennison Corp (NYSE:AVY), a manufacturer of converted paper products with a market capitalization of $13.5 billion and an impressive "GOOD" Financial Health score according to InvestingPro, disclosed the outcomes of its Annual Meeting of Stockholders held on Sunday and a new stock repurchase program. The meeting saw the election of nine directors and the approval of executive compensation, among other items.

The stockholders ratified the appointment of PricewaterhouseCoopers (PwC) as the company’s independent registered public accounting firm for the fiscal year 2025. However, a shareholder proposal regarding a stockholder approval requirement for excessive golden parachutes did not pass.

A key highlight from the meeting is the Board’s authorization of a new stock repurchase program. Avery Dennison has been authorized to buy back shares of its common stock with a fair market value of up to $750 million. This repurchase is in addition to any outstanding amount under any previous Board authorization. InvestingPro data reveals that management has been consistently aggressive with share buybacks, while maintaining a strong 32% return on equity and a healthy balance sheet with an Altman Z-Score of 4.86.

The company’s stockholders participated in significant numbers, with over 90% of the eligible shares represented at the meeting. This high turnout indicates a strong interest in the company’s governance among its shareholders.

The 8K filing, which serves as the source of this information, provides a transparent view of the company’s corporate decisions and financial strategies. Avery Dennison’s move to authorize additional stock repurchases reflects a common method companies use to return value to shareholders and potentially boost the stock price by reducing the number of shares outstanding.

In other recent news, Avery Dennison Corporation announced a 7% increase in its quarterly dividend, raising it to $0.94 per share. This decision follows Avery Dennison’s 2024 sales report of $8.8 billion, showcasing its ongoing commitment to shareholder value. Meanwhile, the company’s Q1 2025 earnings report revealed an adjusted EPS of $2.30, slightly missing the forecast of $2.32, with revenue also falling short at $2.15 billion against an expected $2.16 billion. Analysts at JPMorgan downgraded Avery Dennison’s stock rating from Overweight to Neutral, lowering the price target from $205.00 to $172.00, citing flat year-over-year sales and earnings as influencing factors. Baird also reduced its price target for Avery Dennison from $220.00 to $210.00 but maintained an Outperform rating, noting strong operational execution despite global trade challenges. Avery Dennison’s Intelligent Labels segment showed mid-single-digit growth, although the company faces potential declines in apparel revenue in Q2. The company returned $331 million to shareholders through share repurchases and dividends, demonstrating its robust financial health amidst these developments.

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