BofA Merrill Lynch analyst George Staphos downgraded Avery Dennison to Neutral from Buy, stating that he expects sluggish Q2 revenue trends in the packaging and paper space and he favors a strategy of being overweight the combination of rigid packaging and some "lower quality stocks" that could benefit from an uptick in emerging markets and trade deal sentiment. Avery should benefit from restructuring and operating leverage in Retail Branding & Information Solutions, but he cites the stock's recent outperformance and potential volume challenges in Label & Graphic Materials for his lower rating.

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."