NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 110.12% to $11.90 million when compared to the same quarter last year. In addition, AVERY DENNISON CORP has also vastly surpassed the industry average cash flow growth rate of 10.93%.
- AVERY DENNISON CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AVERY DENNISON CORP reported lower earnings of $1.45 versus $2.95 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.45).
- AVY, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 10.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Services & Supplies industry average. The net income has decreased by 2.0% when compared to the same quarter one year ago, dropping from $44.80 million to $43.90 million.
- AVY has underperformed the S&P 500 Index, declining 24.27% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
Avery Dennison Corporation manufactures and sells pressure-sensitive materials, brand identification and information management products, and other converted products worldwide. The company has a P/E ratio of 21.6, above the average industrial industry P/E ratio of 17.6 and above the S&P 500 P/E ratio of 17.7. Avery Dennison has a market cap of $3.3 billion and is part of the
industry. Shares are up 9.9% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff