Avery Dennison's (AVY) Radio Frequency Identification, or RFID, tags business and adjusted earnings growth are expected to inflect higher in fiscal 2026, supported by a new Walmart (WMT) rollout, UBS Securities said in a Thursday note.

Assuming reasonable base growth, the company could achieve about 10% adjusted EPS growth in 2026 and around 12% longer term, the brokerage said.

UBS said the broader Walmart RFID rollout into bakery, meat, and deli sections could add more than 10% growth to Avery Dennison's RFID sales over the next two years.

The new initiative follows the companies' recent announcement that Walmart will use Avery Dennison's RFID-enabled labels in fresh food categories, including meat, bakery, and deli.

As retailers move past tariff-related disruptions, the firm expects focus to return to efficiency and cost improvements, expanding the company's backlog of new RFID deployments and supporting longer-term growth.

UBS upgraded the stock to buy from neutral and raised its price target to $218 from $181.

Shares of Avery Dennison were up 3.5% in recent trading.

Price: 106.04, Change: -1.10, Percent Change: -1.03