William Blair Downgrades Acuity Brands (AYI) to Market Perform

William Blair analyst Ryan Merkel downgraded Acuity Brands (NYSE: AYI) from Outperform to Market Perform.

The analyst comments "Lighting market remains muted and higher rates pose downside to estimates. Acuity’s execution has been solid in a tough lighting cycle. However, we believe a cautious stance is warranted with rising interest rates and cost inflation. Commentary in our survey leaned negative, with much requoting, project delays, and competitive pricing. While we expect an in-line quarter, we think there is downside to Street fiscal 2027 numbers and what we believe Acuity will guide. We expect Acuity to guide fiscal 2027 EPS in the $20.50-$22 range (Street $21.77) based on ABL revenue up low single digits and AIS up midteens. We lowered our fiscal 2027 EPS estimate to $20.60, assuming ABL revenues are flat with gross margin down 10 basis points on soft volumes and potential price/cost headwinds (memory, metals, and freight). Shares trade at 15 times our 2027 EPS estimate, which is in line with the five-year average. During the rising rate backdrop of 2022-2023, shares traded at 13 times."

For an analyst ratings summary and ratings history on Acuity Brands click here. For more ratings news on Acuity Brands click here.

Shares of Acuity Brands closed at $319.42 yesterday.

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