Is Avery Dennison Corp. overvalued or undervalued?

As of 10 June 2025, the valuation grade for Avery Dennison Corp. has moved from fair to expensive, indicating that the company is overvalued. The current P/E ratio stands at 30, which is higher than the industry average of approximately 29.05, while the EV to EBITDA ratio is 22.40, also above the peer average of 16.95. Additionally, the PEG ratio of 2.43 suggests that the stock may not be growing fast enough to justify its current price.
In comparison to its peers, Ball Corp. is considered very expensive with a P/E of 39.93, highlighting that while Avery Dennison is overvalued, it is not the most overvalued in its sector. The company's return metrics, such as a ROE of 32.96% and ROCE of 20.45%, are strong, yet the recent stock performance shows a decline of 20.96% over the past year, contrasting sharply with the S&P 500's gain of 10.26% in the same period. This further reinforces the conclusion that Avery Dennison is currently overvalued.