Acuity Brands On Track To Beat Earnings Estimates Again

The lighting and building management firm Acuity Brands is expected to report its fiscal fourth-quarter earnings of $2.88 per share, which represents year-over-year growth of over 22%, up from $2.35 per share seen in the same period a year ago.

The Atlanta, Georgia-based company would post year-over-year revenue growth of nearly 10% to around $975 million. The company’s earnings per share have surpassed consensus estimates four times in all the last four quarters.

According to ZACKS Research, in the fourth quarter, the company expects to achieve a gross margin of 42%. Furthermore, Acuity Brands expects that the Lighting and Lighting Controls business will grow at a total construction plus rate over the long term.

In the long run, growth should be around the mid-single digits. Additionally, it anticipates ISG will grow in the mid-teens over the long-term, ZACKS Research added.

Analyst Comments

“We remain cautiously optimistic as we have seen improvement in construction indicators. We seek an update on the Acuity Brands Lighting segment, particularly as it relates to construction and retrofit as well as retail. We also look for commentary around the ISG segment, with a focus on Distech and platforms,” noted Jeffrey Osborne, equity analyst at Cowen.

“We also look for an update on steel and aluminium pricing trends given Acuity uses 70k tons annually. Lastly, we look for an update on how recent price increases have been received by the market, given the inflation of raw material costs.”

Acuity Brands shares have surged over 40% so far this year.

Acuity Brands Stock Price Forecast

Three analysts who offered stock ratings for Acuity Brands in the last three months forecast the average price in 12 months of $196.00 with a high forecast of $216.00 and a low forecast of $163.00.

The average price target represents a 12.66% change from the last price of $173.97. From those three analysts, two rated “Buy”, none rated “Hold” while one rated “Sell”, according to Tipranks.

Several other analysts have also updated their stock outlook. Credit Suisse slashed the target price to $209 from $212. UBS raised the price target to $163 from $152. Cowen and company lifted the target price to $184 from $181.

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