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Avery Dennison (AVY) Q3 Earnings: A Beat in the Cards?
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Avery Dennison Corporation (AVY - Free Report) is slated to report third-quarter 2016 results on Oct 26, before the opening bell. In the last reported quarter, the company’s adjusted earnings and sales both improved year over year, outperforming the respective Zacks Consensus Estimate. Let’s see how things are shaping up prior to this announcement.
Earnings Whispers
Our proven model shows that Avery Dennison is likely to beat earnings in the to-be-reported quarter because it has the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold).
Zacks ESP: Avery Dennison’s Earnings ESP is +1.00% as the Most Accurate estimate of $1.01 is higher than the Zacks Consensus Estimate of $1.00. A positive ESP serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Avery Dennison carries a Zacks Rank #2. The combination of the company’s favorable Zacks Rank with a positive ESP makes us confident of an earnings beat.
Notably, the stocks having a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
In the last quarter, the company delivered a positive earnings surprise of 7.92%. The company has outperformed the Zack Consensus Estimate in the last four quarters with an average positive earnings surprise of 7.44%.
Avery Dennison’s results reflect continued outperformance in Pressure-sensitive materials (PSM) business. Its aim in PSM has been to create value by organically growing the top line of this high return business to a range of 4% to 5%, while expanding operating margin. The company remains focused in shifting PSM's portfolio mix toward high-value graphic and specialty labels materials, consequently, reaping benefits from the initiative.
Additionally, Avery Dennison’s Retail Branding and Information Solutions (RBIS) segment continues to execute well on its business model transformation. It will enable this business to win in the less differentiated value and contemporary segments, while driving significant margin expansion. Further, the company is reducing fixed costs, localizing material sourcing and responding more rapidly to changes in customer needs by decentralizing decision making. These actions are likely to drive growth.
Stocks to Consider
Avery Dennison is not the only stock looking up this earnings season. Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Heritage-Crystal Clean, Inc has an Earnings ESP of +14.29% and also sports a Zacks Rank #1.
Ball Corporation carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.
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Avery Dennison (AVY) Q3 Earnings: A Beat in the Cards?
Avery Dennison Corporation (AVY - Free Report) is slated to report third-quarter 2016 results on Oct 26, before the opening bell. In the last reported quarter, the company’s adjusted earnings and sales both improved year over year, outperforming the respective Zacks Consensus Estimate. Let’s see how things are shaping up prior to this announcement.
Earnings Whispers
Our proven model shows that Avery Dennison is likely to beat earnings in the to-be-reported quarter because it has the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold).
Zacks ESP: Avery Dennison’s Earnings ESP is +1.00% as the Most Accurate estimate of $1.01 is higher than the Zacks Consensus Estimate of $1.00. A positive ESP serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Avery Dennison carries a Zacks Rank #2. The combination of the company’s favorable Zacks Rank with a positive ESP makes us confident of an earnings beat.
Notably, the stocks having a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
In the last quarter, the company delivered a positive earnings surprise of 7.92%. The company has outperformed the Zack Consensus Estimate in the last four quarters with an average positive earnings surprise of 7.44%.
AVERY DENNISON Price and EPS Surprise
AVERY DENNISON Price and EPS Surprise | AVERY DENNISON Quote
Factors at Play
Avery Dennison’s results reflect continued outperformance in Pressure-sensitive materials (PSM) business. Its aim in PSM has been to create value by organically growing the top line of this high return business to a range of 4% to 5%, while expanding operating margin. The company remains focused in shifting PSM's portfolio mix toward high-value graphic and specialty labels materials, consequently, reaping benefits from the initiative.
Additionally, Avery Dennison’s Retail Branding and Information Solutions (RBIS) segment continues to execute well on its business model transformation. It will enable this business to win in the less differentiated value and contemporary segments, while driving significant margin expansion. Further, the company is reducing fixed costs, localizing material sourcing and responding more rapidly to changes in customer needs by decentralizing decision making. These actions are likely to drive growth.
Stocks to Consider
Avery Dennison is not the only stock looking up this earnings season. Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Casella Waste Systems Inc. (CWST - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage-Crystal Clean, Inc has an Earnings ESP of +14.29% and also sports a Zacks Rank #1.
Ball Corporation carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>