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    Is Avery Dennison (AVY) Undervalued On Strong Q2 Earnings And Updated Guidance?

    Simply Wall St·08/02/2026 08:21:02
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    Avery Dennison (AVY) drew fresh investor attention after reporting second quarter 2026 earnings that exceeded revenue and profit expectations, updating full year guidance, and underscoring momentum in higher value areas like Intelligent Labels.

    See our latest analysis for Avery Dennison.

    The latest earnings beat, updated guidance and ongoing buybacks have arrived after a mixed stretch for Avery Dennison’s stock, with the share price down 7% year to date but a 1 year total shareholder return of 4.67%. This may suggest that momentum is rebuilding as investors reassess growth and risk.

    If Avery Dennison’s update has you thinking about where else growth stories could emerge, it may be a good moment to check out 18 top founder-led companies

    Avery Dennison now trades at a clear discount to both internal fair value estimates and analyst targets after this latest rebound. Is the gap reflecting genuine concern about near term risks, or has caution gone too far? The valuation section shows what comes next.

    Most Popular Narrative: 15.3% Undervalued

    Avery Dennison last closed at $169.73, while the most widely followed narrative places fair value closer to $200.30. That gap rests on a detailed view of future earnings, margins, and cash flows.

    The accelerating global adoption of smart labels, RFID, and traceable technologies, seen in robust growth in food and logistics (mid-teens growth) and ongoing program rollouts (e.g., Kroger and new pilots), positions Avery Dennison for sustained revenue expansion as more end-markets digitize their supply chains and inventory management.

    Read the complete narrative.

    Want to understand why this RFID and smart label story supports a higher valuation? The key drivers sit in projected top line growth, margin expansion, and the earnings multiple that analysts believe Avery Dennison can justify over time. The full narrative walks through each step of that calculation and how it adds up to a fair value above today’s price.

    Result: Fair Value of $200.30 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, Avery Dennison’s narrative still faces clear risks, including pressure from tariffs on earnings and the heavy exposure of Intelligent Labels to weaker apparel and retail demand.

    Find out about the key risks to this Avery Dennison narrative.

    Next Steps

    With both risks and rewards now in focus for Avery Dennison, it makes sense to move quickly and review the underlying data yourself. To see how the latest concerns and positives line up in detail, take a closer look at 4 key rewards and 1 important warning sign

    Looking for more investment ideas beyond Avery Dennison?

    Do not stop with Avery Dennison. Use the Simply Wall St Screener to quickly uncover other opportunities that could fit your portfolio and help you stay a step ahead.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.