Acuity Brands (AYI) Downgraded to “Sell” at Zacks Investment Research

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Acuity Brands (NYSE:AYI) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Friday.

According to Zacks, “Higher employee-related expenses and rising input costs in electronic and certain oil-based components are pressing concerns for Acuity Brands. The company’s gross and operating margins have suffered in the fiscal first quarter of 2019 owing to rising SD&A expenses arising from higher freight and commission expenses for supporting greater sales volume, along with higher employee-related and acquisition-related costs. The company expects higher level of employee-related costs to continue in the rest of the fiscal 2019, given the tight skills labor market, eventually contributing to a rise in wage inflation. Moreover, the lighting industry is witnessing weak demand for luminaries over the past few quarters. The trend is likely to continue in the near future as well. Although Acuity Brands’ shares have outperformed its industry in the past year, estimates have been trending downward for the current year.”

A number of other research firms have also weighed in on AYI. Wells Fargo & Co lowered their price target on shares of Acuity Brands from $161.00 to $159.00 and set an “outperform” rating on the stock in a research report on Wednesday, January 2nd. Credit Suisse Group upgraded shares of Acuity Brands from a “neutral” rating to an “outperform” rating and boosted their price target for the stock from $128.00 to $148.00 in a research report on Wednesday, March 6th. Roth Capital set a $150.00 price target on shares of Acuity Brands and gave the stock a “sell” rating in a research report on Thursday, December 20th. Finally, Oppenheimer lowered their price target on shares of Acuity Brands from $170.00 to $166.00 in a research report on Friday, January 11th. Three research analysts have rated the stock with a sell rating, four have assigned a hold rating and six have given a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and an average price target of $151.67.

AYI stock opened at $132.04 on Friday. Acuity Brands has a one year low of $103.48 and a one year high of $173.01. The firm has a market cap of $5.25 billion, a P/E ratio of 16.06, a PEG ratio of 1.41 and a beta of 1.56. The company has a current ratio of 1.92, a quick ratio of 1.28 and a debt-to-equity ratio of 0.20.

Acuity Brands (NYSE:AYI) last announced its earnings results on Wednesday, January 9th. The electronics maker reported $2.32 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $2.02 by $0.30. Acuity Brands had a net margin of 9.49% and a return on equity of 20.88%. The business had revenue of $932.60 million for the quarter, compared to analyst estimates of $920.39 million. During the same quarter last year, the business earned $1.94 earnings per share. The company’s revenue for the quarter was up 10.7% compared to the same quarter last year. Research analysts predict that Acuity Brands will post 8.83 earnings per share for the current year.

A number of hedge funds have recently modified their holdings of the business. BlackRock Inc. raised its stake in shares of Acuity Brands by 2.7% in the 4th quarter. BlackRock Inc. now owns 4,157,697 shares of the electronics maker’s stock valued at $477,928,000 after acquiring an additional 108,678 shares during the period. JPMorgan Chase & Co. raised its stake in shares of Acuity Brands by 14.8% in the 3rd quarter. JPMorgan Chase & Co. now owns 1,503,901 shares of the electronics maker’s stock valued at $236,413,000 after acquiring an additional 194,259 shares during the period. Vaughan Nelson Investment Management L.P. purchased a new stake in Acuity Brands during the 3rd quarter worth approximately $92,750,000. Panagora Asset Management Inc. increased its stake in Acuity Brands by 152.5% during the 3rd quarter. Panagora Asset Management Inc. now owns 585,742 shares of the electronics maker’s stock worth $92,079,000 after buying an additional 353,786 shares during the period. Finally, Bank of New York Mellon Corp increased its stake in Acuity Brands by 9.4% during the 3rd quarter. Bank of New York Mellon Corp now owns 571,971 shares of the electronics maker’s stock worth $89,915,000 after buying an additional 49,050 shares during the period. 92.86% of the stock is currently owned by institutional investors.

About Acuity Brands

Acuity Brands, Inc provides lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally. The company offers lighting and control products and solutions, including recessed, surface, and suspended lighting; down, decorative, emergency and exit, track, day, special-use, street and roadway, parking garage, underwater, area pedestrian, flood, decorative site, and landscape lighting; occupancy sensors; photo controls; relay panels; architectural dimming panels; and integrated lighting controls systems.

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