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Research Alert: CFRA Maintains Hold Opinion On Shares Of Avery Dennison Corporation

· 02/04/2021 18:54

11:50 PM EST, 02/04/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target price by $29 to $177, 22.5x our '21 EPS estimate, a premium to AVY's three-year average forward P/E of 17.7x, which we think is warranted by an acceleration in earnings growth. We raise our '21 EPS estimate by $0.80 to $7.85 and start our '22 EPS forecast at $8.55. AVY posts Q4 adjusted EPS of $2.27 vs. $1.73, $0.16 above consensus, on a revenue beat of 3.6%. Q4 organic sales rose 3.4% Y/Y, led by the Label and Graphic Materials segment with 3.6% organic growth. Total RFID product sales increased Y/Y by 55% (due to the acquisition of Smartrac) and organic RFID sales were up 21%. The Q4 adjusted EBIT margin expanded Y/Y by 160 basis points to 13.5%. In Q4, AVY realized around $18 million in pre-tax restructuring savings, bringing the total for 2020 to $65 million. In '21, we forecast sales growth of 7.4% (despite a 1% headwind from the extra week in '20), driven by organic growth of 5% and new revenue from acquisitions. In '21, we anticipate record free cash flow of $650 million.