Analyst Downgrades Avery Dennison On Weak Demand

HARTFORD, Conn. (AP) — Shares of Avery Dennison Corp. fell Friday as an analyst downgraded the adhesive label maker and office supplies provider on low demand as joblessness continues to rise.

Analyst Joseph A. Naya of UBS Investment Research downgraded the Pasadena, Calif., company to "Sell" from "Neutral."

Shares of Avery Dennison have soared 31 percent since July 30, when it released its second-quarter earnings, outpacing the packaging sector and the broader market.

"While we would agree that Avery Dennison has significant operating leverage to improving volumes and management has done a good job cutting costs, we are concerned the stock may be pricing in a rapid rebound in volumes and could come under pressure if that recovery is slow to materialize," Naya said.

The Labor Department reported Friday that employers cut 263,000 jobs last month, up from 201,000 in August and worse than the 180,000 losses economists were expecting. The unemployment rate rose to 9.8 percent.

Naya raised his 12-month price target for Avery Dennison to $30 from $26 on a rebound in volume in its pressure-sensitive materials business. However, he said he is more cautious on the company's retail information services business.