Avery Dennison enters its July 22 earnings release with short sellers paring back exposure even as the stock loses ground — a quietly interesting divergence ahead of what the Street views as a pivotal print.
The most notable move in positioning this week is the sharp pullback in short interest. Shorts fell 8% on the week to 3.2% of free float — a level too modest to signal a crowded trade, but the speed of the exit is worth noting. The bulk of the drop came on July 9, when shares short fell by roughly 230,000 in a single session, and have held near that lower level since. Borrowing costs remain cheap at 0.43%, and borrow availability is extraordinarily loose, running near 2,956% — meaning shares in the lending pool dwarf the number currently borrowed. There is no squeeze pressure in this market.
Options tell a different story from shorts, though not an alarming one. The put/call ratio of 4.34 is rich on an absolute basis, but it is running below its 20-day average of 5.63 — putting it roughly 0.8 standard deviations lighter on hedging demand than has been typical recently. What makes the longer trend notable is the direction of travel: PCR has fallen consistently from levels near 8–10 in late June, a substantial unwinding of defensive positioning over the past three weeks. Options traders appear to have been net sellers of downside protection heading into the print, not buyers. The 52-week PCR range — with a high of 11.85 and a low of 0.12 — signals that the current reading is well off the most fearful levels seen this year.
Analyst opinion in the final pre-earnings window is split in a revealing way. Truist Securities (Buy) lowered its target this week from $221 to $209, the second trim since late April, while B of A Securities (Buy) moved in the opposite direction, raising its target from $202 to $210. Citigroup sits at Neutral with a $184 target, clipped again this week from $185. The mean target across the Street is $200.80, roughly 28% above the current price of $157.16 — suggesting genuine conviction in long-term upside, but also that the stock has drifted well below where analysts thought it would be. J.P. Morgan (Overweight) cut its target from $205 to $185 back in April, widening the bulls-vs-neutral gap. Forward earnings momentum is a relative bright spot: the 12-month forward EPS growth factor ranks in the 86th percentile of the universe, while the dividend score ranks at the 98th — AVY is one of the stronger income names in the packaging space by this measure. EV/EBITDA has drifted up to around 10.4x over the past month, and P/E is 15.4x — undemanding multiples if the company can sustain margins.
The sector backdrop adds context to the week's 4.4% decline. Among AVY's closest packaging peers, AMBP fell nearly 7% on the week — the worst performer in the group — while ATR managed a 0.5% gain, the only peer in positive territory. CCK and AMCR both dropped 2–4%, suggesting the softness in AVY is sector-wide rather than company-specific. The outlier is OI, which collapsed 14% on the week and 12% on Tuesday alone — an idiosyncratic move that highlights the credit-sensitive risks sitting elsewhere in the packaging complex that AVY, with its comparatively stable demand profile, has so far avoided.
On July 22, the sharpest question is whether RFID/intelligent labels growth in the Solutions segment can offset the anticipated softness in apparel volumes — that tension, rather than any squeeze dynamic in the lending market, is where the week's positioning debate ultimately lands.
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