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The pressure-sensitive materials company reported first-quarter earnings on April 25 of $43.9 million, or 44 cents a share, down from year-earlier earnings of $44.8 million.
"AVY held their Annual Investor Presentation in NY, where mgmt outlined relatively aggressive earnings targets through 2015, calling for 10-15% net income growth and 15-20% EPS growth," Credit Suisse analysts wrote in a May 17 report. "Given AVY's historical average net income/EPS growth of ~5% (although it has been volatile given acquisitions and divestitures), the uncertain macro environment and mgmt's lack of credibility on delivering on their targets, we believe the targets are a bit aggressive and will require a solid pickup in the macro. As such, we are remaining on the sidelines until we see mgmt start to execute. Additionally, based on the CS HOLT valuation framework, even if AVY were to hit their targets, the stock's risk/reward is balanced, as it is currently implying 12% downside and only 16% upside if AVY hits the high end of their targets."
Forward Annual Dividend Yield: 3.7%