Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Our verdict in one paragraph: Avery Dennison is a well-run, better-than-average industrial company — the clear global leader in pressure-sensitive label materials and the dominant maker of RFID inlays. We respect the franchise and the people running it. But when we apply our full test for a wonderful business — durable pricing power, high returns on total capital, an ability to compound without strain — Avery falls short. It is a spread business that passes raw material costs through rather than setting prices, it earns roughly 13–15% on total capital rather than 25%+, it must restructure continuously (600 positions eliminated in the first half of this year alone) to hold its margins, and the balance sheet carries $3.7 billion of debt against book equity that is entirely goodwill.
Recent filings analysed: 8-K (2026-08-19), 10-Q (2026-08-04), 8-K (2026-07-30), 8-K (2026-06-04).
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