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Bull of the Day: Avery Dennison (AVY)

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Avery Dennison's (AVY) adjusted earnings increased 77% year over year to $0.53 per share in third-quarter 2012, beating the Zacks Consensus Estimate of $0.45. Revenues fell 0.8% year over year to $1.488 billion, but were ahead of the Zacks Consensus Estimate of $1.487 billion.

In the quarter, net sales grew approximately 6% on an organic basis, attributed to increased volumes in pressure sensitive materials and a rebound in the core business of retail branding and information solutions. Avery's restructuring initiatives is expected to deliver annualized savings of more than $100 million in 2013.

Furthermore, with the divestiture of the underperforming Office and Consumer Products unit, the company will be able to focus on its two core businesses. Given the positives, we have upgraded our recommendation from Underperform to Outperform with a target price of $42.

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