Avery Dennison Corporation produces and sells pressure-sensitive materials worldwide. It operates through Pressure-Sensitive Materials, Retail Branding and Information Solutions, and Vancive Medical Technologies segments. The company was founded in 1935 and is based in Glendale, California.
AVY Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Avery Dennison Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Avery Dennison Corp ranked in the 60th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 61.5%. In terms of the factors that were most noteworthy in this DCF analysis for AVY, they are:
The compound growth rate in the free cash flow of Avery Dennison Corp over the past 5.76 years is 0.29%; that's higher than 77.9% of free cash flow generating stocks in the Industrials sector.
Avery Dennison Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 21.27% of tickers in our DCF set.
AVY's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 21.27% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CMI, MGRC, AIMC, CSX, and DAL can be thought of as valuation peers to AVY, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.