Avery Dennison (AVY) has rounded out FY 2025 with Q4 revenue of US$2.3b and basic EPS of US$2.15 on net income of US$166.4m, while trailing twelve month revenue sits at US$8.9b and EPS at US$8.79. The company has seen quarterly revenue move from US$2.19b in Q4 2024 to US$2.27b in Q4 2025, with basic EPS moving from US$2.16 to US$2.15 over the same period, and a trailing twelve month net margin that has eased slightly to 7.8%. This sets up a results season in which investors will be weighing steady top line scale against softer profitability.

See our full analysis for Avery Dennison.

With the headline numbers on the table, the next step is to see how this earnings print lines up against the widely followed narratives about Avery Dennison’s growth, margins, and long term earnings power.

Margins Ease Back To 7.8%

• Over the last 12 months, Avery Dennison earned US$688 million of net income on US$8.9b of revenue, which works out to a 7.8% net margin compared with 8.0% a year earlier.
• What stands out for the bearish narrative on profitability is that this 0.2 percentage point margin squeeze arrives alongside trailing five year earnings that declined 0.9% a year, even though quarterly net income has hovered around US$166 million to US$189 million across FY 2025.
  • Critics highlight that trailing 12 month net income slipped from US$704.9 million to US$688 million, which lines up with concerns about pressure on profitability rather than clear improvement.
  • At the same time, Q4 FY 2025 net income of US$166.4 million is close to the US$166.3 million seen in both Q3 and Q1, which challenges any view that profits are collapsing and instead points to relatively steady, if slightly softer, earnings.

To see how the latest margin picture fits into the more cautious take on Avery Dennison, some investors are asking whether recent profitability trends justify a more defensive stance. 🐻 Avery Dennison Bear Case

EPS Trend Versus Growth Story

• Trailing 12 month basic EPS is US$8.79, slightly below the US$8.94 level recorded at the end of Q2 FY 2025, while forecasts call for earnings to grow about 9.3% a year even though earnings declined 0.9% a year over the past five years.
• The bullish argument that earnings growth can pick up from here has to wrestle with the fact that recent EPS has moved in a fairly tight band, with quarterly EPS between about US$2.10 and US$2.42 and only modest changes in trailing 12 month EPS over the last six quarters.
  • Supporters point to the forecast 9.3% yearly earnings growth as a sign that the business can build on current US$8.79 EPS, yet the flat pattern in quarterly net income year to date suggests that acceleration is not visible in these reported numbers.
  • On the other hand, the step up in trailing 12 month EPS from US$8.37 in Q3 FY 2024 to above US$8.7 through FY 2025 helps counter the most pessimistic views that earnings are stuck permanently below prior levels.

Valuation Gap And Debt Trade Off

• The shares trade at US$193.13, which sits well below a DCF fair value estimate of US$468.60, while the current P/E of 21.7x is close to the North American packaging industry average of 21.5x and below the 26.9x peer average, and the stock offers a 1.95% dividend yield.
• Supporters of a bullish view see the large gap between the current share price and the DCF fair value as a key part of the upside case, yet they also need to factor in that revenue growth is forecast at 4.4% a year and the company carries a high level of debt flagged as a risk.
  • The roughly inline 21.7x P/E compared with the industry suggests the market is not assigning a clear premium despite the DCF fair value being more than double the current price.
  • Forecast revenue growth of 4.4% a year and the 1.95% dividend give some support to the bullish view on total return potential, but the high debt level means part of that story depends on Avery Dennison continuing to comfortably service its obligations from earnings like the US$688 million recorded over the last year.

After seeing how the current price, DCF fair value gap, and debt load interact, many investors are turning to a balanced narrative that weighs potential upside against execution risks. 📊 Read the full Avery Dennison Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Avery Dennison's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Avery Dennison’s picture of slightly softer margins, flat recent EPS and a high debt load may leave you wanting a stronger financial cushion.

If that combination worries you, you may want to shift your focus toward companies with healthier balance sheets by checking out solid balance sheet and fundamentals stocks screener (388 results) today so you can compare sturdier options side by side.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.