Barclays Starts Avery Dennison (AVY) at Overweight

Barclays analyst Michael Leithead initiates coverage on Avery Dennison (NYSE: AVY) with a Overweight rating and a price target of $250.00.

The analyst comments: "We view Avery Dennison as a unique, high-quality material science company, with a long-term track record of double-digit EPS and cash flow growth with stable, mid-teens ROIC. We believe management continues to do a solid job evolving the company beyond its base labels / materials business and prudently redeploying that capital to the faster-growing, greater-opportunity RFID / digital ecosystem. We acknowledge there are some ongoing investor questions about the long-term RFID growth algorithm (i.e., competition, pricing, new adoption timing/rates); however, we think a) likely near-term new customer roll-outs help allay concerns ("very soon" grocery opportunity teased at the Sept. investor day), b) AVY's scale, vertical integration, and first-mover advantages provide a moat around the Intelligent Labels business, and c) a more-bearish consolidated revenue scenario of 2-3% CAGR over the next few years (vs. 5%+ guide) would still flow through to a more resilient / attractive earnings algorithm than our average covered company."

For an analyst ratings summary and ratings history on Avery Dennison click here. For more ratings news on Avery Dennison click here.

Shares of Avery Dennison closed at $214.59 yesterday.

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