JPMorgan analyst Jeffrey Zekauskas downgraded Avery Dennison to Underweight from Neutral with an unchanged price target of $105. Avery shares increased 26% year-to-date without improvement in business fundamentals, and "arguably some deterioration," Zekauskas tells investors in a research note. The company's trading multiple is high and business fundamentals seem to be decelerating, says the analyst. He believes "earnings bumps along the way" could negatively impact Avery Dennison's valuation.

Reports Q1 revenue $2.2B, consensus $2.15B. "We are off to a strong start to the year. In the first quarter we delivered significant earnings growth, driven by higher volume and productivity gains," said Deon Stander, president and CEO. "Materials Group delivered significant volume growth and margin expansion, as downstream inventory destocking subsided and volumes continued to normalize. Solutions Group delivered strong top-line growth, driven by high-value categories, despite apparel imports continuing to be below demand. In Intelligent Labels, we are targeting to deliver another year of significant growth in 2024, as the apparel industry normalizes and we accelerate the adoption of our solutions that help address key industry challenges, further advancing our leadership position at the intersection of the physical and digital," added Stander. We continue to expect strong earnings growth in 2024 and remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline. Once again, I want to thank our entire team for their continued resilience, focus on excellence and commitment to addressing the unique challenges at hand."