Intrinsic value of Avery Dennison - AVY

Previous Close

$94.65

  Intrinsic Value

$147.36

stock screener

  Rating & Target

str. buy

+56%

  Value-price divergence*

+27%

Previous close

$94.65

 
Intrinsic value

$147.36

 
Up/down potential

+56%

 
Rating

str. buy

 
Value-price divergence*

+27%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AVY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.01
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
Revenue, $m
  6,087
  6,440
  6,808
  7,193
  7,595
  8,014
  8,453
  8,911
  9,391
  9,893
  10,418
  10,968
  11,544
  12,147
  12,779
  13,442
  14,136
  14,864
  15,627
  16,427
  17,266
  18,146
  19,069
  20,038
  21,054
  22,120
  23,239
  24,413
  25,645
  26,938
  28,295
Variable operating expenses, $m
 
  2,732
  2,884
  3,043
  3,208
  3,381
  3,562
  3,750
  3,948
  4,155
  4,371
  4,518
  4,756
  5,004
  5,265
  5,537
  5,823
  6,123
  6,438
  6,767
  7,113
  7,475
  7,856
  8,255
  8,673
  9,112
  9,573
  10,057
  10,564
  11,097
  11,656
Fixed operating expenses, $m
 
  3,175
  3,255
  3,336
  3,420
  3,505
  3,593
  3,683
  3,775
  3,869
  3,966
  4,065
  4,166
  4,271
  4,377
  4,487
  4,599
  4,714
  4,832
  4,953
  5,076
  5,203
  5,333
  5,467
  5,603
  5,744
  5,887
  6,034
  6,185
  6,340
  6,498
Total operating expenses, $m
  5,609
  5,907
  6,139
  6,379
  6,628
  6,886
  7,155
  7,433
  7,723
  8,024
  8,337
  8,583
  8,922
  9,275
  9,642
  10,024
  10,422
  10,837
  11,270
  11,720
  12,189
  12,678
  13,189
  13,722
  14,276
  14,856
  15,460
  16,091
  16,749
  17,437
  18,154
Operating income, $m
  477
  532
  669
  814
  967
  1,128
  1,298
  1,478
  1,668
  1,869
  2,081
  2,385
  2,622
  2,873
  3,137
  3,418
  3,714
  4,027
  4,357
  4,707
  5,077
  5,467
  5,880
  6,316
  6,777
  7,264
  7,778
  8,321
  8,895
  9,501
  10,140
EBITDA, $m
  658
  724
  867
  1,019
  1,178
  1,347
  1,525
  1,713
  1,911
  2,121
  2,342
  2,576
  2,823
  3,084
  3,360
  3,651
  3,960
  4,285
  4,629
  4,993
  5,377
  5,783
  6,212
  6,665
  7,143
  7,649
  8,183
  8,746
  9,341
  9,969
  10,633
Interest expense (income), $m
  59
  55
  64
  74
  85
  96
  107
  119
  131
  144
  157
  172
  186
  202
  218
  235
  253
  272
  291
  312
  333
  356
  380
  404
  430
  458
  487
  517
  548
  581
  616
Earnings before tax, $m
  477
  477
  605
  740
  882
  1,033
  1,192
  1,360
  1,537
  1,725
  1,924
  2,213
  2,436
  2,671
  2,919
  3,182
  3,461
  3,755
  4,066
  4,395
  4,743
  5,111
  5,501
  5,912
  6,347
  6,806
  7,292
  7,805
  8,347
  8,919
  9,524
Tax expense, $m
  156
  129
  163
  200
  238
  279
  322
  367
  415
  466
  519
  598
  658
  721
  788
  859
  934
  1,014
  1,098
  1,187
  1,281
  1,380
  1,485
  1,596
  1,714
  1,838
  1,969
  2,107
  2,254
  2,408
  2,571
Net income, $m
  321
  348
  442
  540
  644
  754
  870
  993
  1,122
  1,259
  1,404
  1,616
  1,778
  1,950
  2,131
  2,323
  2,526
  2,741
  2,968
  3,209
  3,463
  3,731
  4,015
  4,316
  4,633
  4,968
  5,323
  5,697
  6,093
  6,511
  6,953

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  195
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,396
  4,444
  4,699
  4,964
  5,241
  5,531
  5,833
  6,150
  6,481
  6,827
  7,190
  7,569
  7,967
  8,383
  8,819
  9,277
  9,756
  10,258
  10,785
  11,337
  11,916
  12,523
  13,160
  13,829
  14,530
  15,266
  16,038
  16,848
  17,698
  18,590
  19,527
Adjusted assets (=assets-cash), $m
  4,201
  4,444
  4,699
  4,964
  5,241
  5,531
  5,833
  6,150
  6,481
  6,827
  7,190
  7,569
  7,967
  8,383
  8,819
  9,277
  9,756
  10,258
  10,785
  11,337
  11,916
  12,523
  13,160
  13,829
  14,530
  15,266
  16,038
  16,848
  17,698
  18,590
  19,527
Revenue / Adjusted assets
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
Average production assets, $m
  1,060
  1,121
  1,185
  1,252
  1,321
  1,394
  1,471
  1,551
  1,634
  1,721
  1,813
  1,908
  2,009
  2,114
  2,224
  2,339
  2,460
  2,586
  2,719
  2,858
  3,004
  3,157
  3,318
  3,487
  3,663
  3,849
  4,044
  4,248
  4,462
  4,687
  4,923
Working capital, $m
  -99
  303
  320
  338
  357
  377
  397
  419
  441
  465
  490
  516
  543
  571
  601
  632
  664
  699
  734
  772
  811
  853
  896
  942
  990
  1,040
  1,092
  1,147
  1,205
  1,266
  1,330
Total debt, $m
  1,293
  1,290
  1,488
  1,695
  1,911
  2,137
  2,373
  2,620
  2,878
  3,148
  3,431
  3,727
  4,037
  4,362
  4,702
  5,059
  5,432
  5,824
  6,235
  6,666
  7,117
  7,591
  8,088
  8,609
  9,156
  9,730
  10,332
  10,964
  11,628
  12,324
  13,054
Total liabilities, $m
  3,471
  3,467
  3,665
  3,872
  4,088
  4,314
  4,550
  4,797
  5,055
  5,325
  5,608
  5,904
  6,214
  6,539
  6,879
  7,236
  7,609
  8,001
  8,412
  8,843
  9,294
  9,768
  10,265
  10,786
  11,333
  11,907
  12,509
  13,141
  13,805
  14,501
  15,231
Total equity, $m
  926
  978
  1,034
  1,092
  1,153
  1,217
  1,283
  1,353
  1,426
  1,502
  1,582
  1,665
  1,753
  1,844
  1,940
  2,041
  2,146
  2,257
  2,373
  2,494
  2,621
  2,755
  2,895
  3,042
  3,197
  3,358
  3,528
  3,707
  3,894
  4,090
  4,296
Total liabilities and equity, $m
  4,397
  4,445
  4,699
  4,964
  5,241
  5,531
  5,833
  6,150
  6,481
  6,827
  7,190
  7,569
  7,967
  8,383
  8,819
  9,277
  9,755
  10,258
  10,785
  11,337
  11,915
  12,523
  13,160
  13,828
  14,530
  15,265
  16,037
  16,848
  17,699
  18,591
  19,527
Debt-to-equity ratio
  1.396
  1.320
  1.440
  1.550
  1.660
  1.760
  1.850
  1.940
  2.020
  2.100
  2.170
  2.240
  2.300
  2.370
  2.420
  2.480
  2.530
  2.580
  2.630
  2.670
  2.720
  2.760
  2.790
  2.830
  2.860
  2.900
  2.930
  2.960
  2.990
  3.010
  3.040
Adjusted equity ratio
  0.174
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  321
  348
  442
  540
  644
  754
  870
  993
  1,122
  1,259
  1,404
  1,616
  1,778
  1,950
  2,131
  2,323
  2,526
  2,741
  2,968
  3,209
  3,463
  3,731
  4,015
  4,316
  4,633
  4,968
  5,323
  5,697
  6,093
  6,511
  6,953
Depreciation, amort., depletion, $m
  181
  191
  198
  205
  212
  219
  226
  234
  243
  252
  261
  191
  201
  211
  222
  234
  246
  259
  272
  286
  300
  316
  332
  349
  366
  385
  404
  425
  446
  469
  492
Funds from operations, $m
  446
  540
  639
  745
  856
  973
  1,096
  1,227
  1,365
  1,511
  1,665
  1,807
  1,979
  2,161
  2,353
  2,557
  2,772
  3,000
  3,240
  3,494
  3,763
  4,047
  4,347
  4,664
  4,999
  5,353
  5,727
  6,122
  6,539
  6,980
  7,445
Change in working capital, $m
  -139
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
  38
  39
  41
  43
  46
  48
  50
  53
  55
  58
  61
  64
Cash from operations, $m
  585
  523
  622
  727
  837
  953
  1,076
  1,205
  1,342
  1,487
  1,640
  1,781
  1,952
  2,133
  2,324
  2,526
  2,740
  2,966
  3,204
  3,457
  3,724
  4,006
  4,304
  4,619
  4,952
  5,303
  5,675
  6,067
  6,481
  6,919
  7,381
Maintenance CAPEX, $m
  0
  -106
  -112
  -118
  -125
  -132
  -139
  -147
  -155
  -163
  -172
  -181
  -191
  -201
  -211
  -222
  -234
  -246
  -259
  -272
  -286
  -300
  -316
  -332
  -349
  -366
  -385
  -404
  -425
  -446
  -469
New CAPEX, $m
  -207
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -83
  -87
  -91
  -96
  -100
  -105
  -110
  -115
  -121
  -127
  -133
  -139
  -146
  -153
  -161
  -169
  -177
  -186
  -195
  -204
  -214
  -225
  -236
Cash from investing activities, $m
  -435
  -167
  -176
  -185
  -195
  -205
  -215
  -227
  -238
  -250
  -263
  -277
  -291
  -306
  -321
  -337
  -355
  -373
  -392
  -411
  -432
  -453
  -477
  -501
  -526
  -552
  -580
  -608
  -639
  -671
  -705
Free cash flow, $m
  150
  357
  446
  541
  642
  748
  860
  979
  1,104
  1,237
  1,377
  1,504
  1,661
  1,827
  2,002
  2,188
  2,385
  2,593
  2,813
  3,046
  3,292
  3,552
  3,827
  4,118
  4,426
  4,751
  5,095
  5,458
  5,842
  6,248
  6,676
Issuance/(repayment) of debt, $m
  232
  192
  198
  207
  216
  226
  236
  247
  258
  270
  283
  296
  310
  325
  340
  357
  374
  392
  411
  431
  452
  474
  497
  521
  547
  574
  602
  632
  663
  696
  730
Issuance/(repurchase) of shares, $m
  -191
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  37
  192
  198
  207
  216
  226
  236
  247
  258
  270
  283
  296
  310
  325
  340
  357
  374
  392
  411
  431
  452
  474
  497
  521
  547
  574
  602
  632
  663
  696
  730
Total cash flow (excl. dividends), $m
  179
  548
  644
  748
  858
  974
  1,096
  1,225
  1,362
  1,507
  1,660
  1,800
  1,971
  2,152
  2,343
  2,545
  2,759
  2,985
  3,224
  3,476
  3,744
  4,026
  4,324
  4,640
  4,973
  5,325
  5,697
  6,090
  6,505
  6,944
  7,407
Retained Cash Flow (-), $m
  40
  -52
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -84
  -87
  -92
  -96
  -101
  -105
  -110
  -116
  -121
  -127
  -134
  -140
  -147
  -154
  -162
  -170
  -178
  -187
  -196
  -206
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  497
  588
  690
  797
  910
  1,029
  1,156
  1,289
  1,431
  1,580
  1,716
  1,883
  2,060
  2,247
  2,444
  2,653
  2,874
  3,108
  3,355
  3,616
  3,892
  4,184
  4,493
  4,819
  5,163
  5,528
  5,912
  6,318
  6,748
  7,201
Discount rate, %
 
  5.10
  5.36
  5.62
  5.90
  6.20
  6.51
  6.83
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.27
  12.89
  13.53
  14.21
  14.92
  15.66
  16.45
  17.27
  18.13
  19.04
  19.99
  20.99
PV of cash for distribution, $m
 
  473
  530
  585
  633
  674
  705
  728
  741
  744
  738
  713
  690
  659
  621
  577
  529
  478
  425
  372
  320
  271
  225
  183
  147
  115
  88
  66
  48
  34
  24
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Avery Dennison Corporation produces and sells pressure-sensitive materials worldwide. It operates through Label and Graphic Materials (LGM), Retail Branding and Information Solutions (RBIS), and Industrial and Healthcare Materials (IHM) segments. The LGM segment offers pressure-sensitive labeling materials; packaging materials and solutions; roll-fed sleeves; engineered films; graphic imaging media; and reflective materials under the Fasson, JAC, and Avery Dennison brands. It serves label converters, package designers, packaging engineers and manufacturers, industrial and sign manufacturers, printers, distributors, designers, advertising and government agencies, and graphics vendors. The RBIS segment designs, manufactures, and sells various branding and information solutions, including creative services, brand embellishments, graphic tickets, tags and labels, sustainable packaging, inventory visibility and loss prevention solutions, data management services, price tickets, printers and scanners, radio-frequency identification inlays and tags, and brand protection and security solutions. This segment serves apparel and footwear brands; manufacturers and retailers; food service, grocery, and pharmaceutical supply chains; consumer goods brands; automotive manufacturers; and transportation companies. The IHM segment offers pressure-sensitive tapes; diaper tapes and closures; fasteners; skin-contact adhesives; surgical, wound care, ostomy, and securement products; and medical barrier films under the Fasson, Avery Dennison, and Vancive brand names. This segment serves tape converters, original equipment and original design manufacturers, construction firms, personal care product manufacturers, manufacturers and retailers, and medical device manufacturers. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Glendale, California.

FINANCIAL RATIOS  of  Avery Dennison (AVY)

Valuation Ratios
P/E Ratio 26
Price to Sales 1.4
Price to Book 9
Price to Tangible Book
Price to Cash Flow 14.3
Price to Free Cash Flow 22.1
Growth Rates
Sales Growth Rate 2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.2%
Cap. Spend. - 3 Yr. Gr. Rate 2.7%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 77.1%
Total Debt to Equity 139.6%
Interest Coverage 9
Management Effectiveness
Return On Assets 8.5%
Ret/ On Assets - 3 Yr. Avg. 7.4%
Return On Total Capital 15.1%
Ret/ On T. Cap. - 3 Yr. Avg. 12.8%
Return On Equity 33.9%
Return On Equity - 3 Yr. Avg. 26.8%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 27.9%
Gross Margin - 3 Yr. Avg. 27.2%
EBITDA Margin 11.8%
EBITDA Margin - 3 Yr. Avg. 10.9%
Operating Margin 7.9%
Oper. Margin - 3 Yr. Avg. 6.8%
Pre-Tax Margin 7.8%
Pre-Tax Margin - 3 Yr. Avg. 6.8%
Net Profit Margin 5.3%
Net Profit Margin - 3 Yr. Avg. 4.6%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 32.4%
Payout Ratio 44.5%

AVY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AVY stock intrinsic value calculation we used $6087 million for the last fiscal year's total revenue generated by Avery Dennison. The default revenue input number comes from 2016 income statement of Avery Dennison. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AVY stock valuation model: a) initial revenue growth rate of 5.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.1%, whose default value for AVY is calculated based on our internal credit rating of Avery Dennison, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Avery Dennison.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AVY stock the variable cost ratio is equal to 42.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3098 million in the base year in the intrinsic value calculation for AVY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5% for Avery Dennison.

Corporate tax rate of 27% is the nominal tax rate for Avery Dennison. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AVY stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AVY are equal to 17.4%.

Life of production assets of 10 years is the average useful life of capital assets used in Avery Dennison operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AVY is equal to 4.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $926 million for Avery Dennison - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 89.432 million for Avery Dennison is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Avery Dennison at the current share price and the inputted number of shares is $8.5 billion.

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COMPANY NEWS

▶ 3 Top Dividend Stocks in Packaging   [Aug-01-17 04:51PM  Motley Fool]
▶ Avery Dennison Declares Quarterly Dividend   [Jul-27-17 06:45AM  Business Wire]
▶ Avery Dennison tops Street 2Q forecasts   [Jul-25-17 09:55PM  Associated Press]
▶ Avery Dennison buys Finesse Medical   [May-22-17 05:55PM  American City Business Journals]
▶ Avery Dennison Acquires Finesse Medical   [11:00AM  Business Wire]
▶ Top Ranked Momentum Stocks to Buy for May 2nd   [May-02-17 11:03AM  Zacks]
▶ Avery Dennison Increases Quarterly Dividend   [Apr-27-17 04:15PM  Business Wire]
▶ Avery Dennison beats Street 1Q forecasts   [07:16AM  Associated Press]
▶ Avery Dennison RFID Announces Partnership with Target   [Apr-03-17 07:00AM  Business Wire]
▶ Avery Dennison Declares Quarterly Dividend   [06:50AM  Business Wire]
▶ [$$] The smart label that wants to restyle your life   [Jan-24-17 12:00AM  at Financial Times]
Stock chart of AVY Financial statements of AVY
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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