Walmart and Avery Dennison's RFID Innovation

Walmart has announced that it will expand the use of RFID technology in the fresh food categories through its collaboration with Avery Dennison. This partnership aims to reduce food waste and improve inventory management in bakery, meat, and deli departments.

This collaboration underscores the increasing demand for advanced digital identity solutions in perishable products, aiming to provide greater transparency and efficiency in the supply chain.

We will examine how Avery Dennison's expanded RFID collaboration with Walmart could change investors' perspectives and impact its innovative growth story.

For one to become a partner with Avery Dennison, it is essential to believe in the company's capability to extend its Smart Label technology beyond the low-growth retail and apparel sectors to high-potential categories like food and logistics. The RFID partnership announced with Walmart strengthens this diversification trend, which is vital in overcoming the slowdown seen in core apparel segments. However, exposure to cyclical retail end markets and trading challenges remains a significant risk factor in the short term; hence, it is thought that this news may not be important enough to fundamentally change the risk profile.

Among Avery Dennison’s recent announcements, the Walmart RFID collaboration is the most notable. The integration of RFID in perishable foods directly reflects analysts' belief that food and logistics sectors have a significant impact on the increased adoption of digital identity. If this momentum continues, there is support for the notion that innovative catalysts could mitigate end-market risks.

However, alongside this innovation narrative, investors need to consider that uncertainties in trade policies are still ongoing.

Avery Dennison’s scenario projects $9.8 billion in revenue and $909.0 million in profit by 2028. Achieving this requires an annual revenue growth of 4.0% and an increase of $198.0 million from the current profit of $711.0 million.

Avery Dennison’s estimates foresee a value of $202.36 per share, indicating a 17% increase from its current price.

Members of the Simply Wall St Community have a wide range of three different investor value estimates between $165.12 and $320.63. Although the Walmart partnership carries long-term catalyst potential, many investors still view exposure to the apparel sector as a significant risk to consider.

Explore three different value estimates about Avery Dennison - find out why the stock might be worth only $165.12!

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