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Investing.com – Avery Dennison (NYSE:AVY) dropped almost 5% after reporting an expected decline in sales and earnings this year because of lower demand.
The second quarter will be the worst, while in the third, the company sees a drop in sales of between 5% and 7%. The label maker is focused on cost control and cash management actions to try to partially offset the decline in demand for certain of its businesses, with a target of free cash flow of about $500 million this year.
Shares are down 12% since hitting an all-time high in January. Avery Dennison has three buy ratings, three holds and one sell, with an average price target of $121.17, according to analysts surveyed by Investing.com.
The company estimates incremental savings from restructuring actions, net of transition costs, of $60 million to $70 million during 2020, and anticipates carryover savings, net of transition costs, of approximately $70 million in 2021, up approximately $10 million since the company’s April outlook for both years.
In addition, the company is targeting net temporary savings of approximately $150 million in 2020 (over half of which has been realized in the first half of the year), with the vast majority of the savings expected to be a headwind as markets recover.
