Banc Of America downgrades office-products company Avery Dennison (AVY) to neutral from buy.
Analyst George Staphos says Avery Dennison attributed miss to higher inventory reserves of new product in its office and consumer segment, higher spending in one of its business, and weakening of volumes across several business in North America and Europe in the late first quarter.
He says the surprisingly notable miss in North America late in the quarter now becomes a trend into the second quarter. He slashes his 89 cents second-quarter earnings per share estimate to 65 cents. He notes it is now unlikely the company will outperform over the next couple quarters.
Staphos cuts his $3.40 2005 earnings per share estimate to $2.85, and his $3.65 2006 earnings per share to $3.20. He cuts his $67 target to $59.