KeyBanc Downgrades Acuity Brands (AYI) to 'Hold' Following Rapid Sentiment Shift

KeyBanc downgraded Acuity Brands (NYSE: AYI) from Buy to Hold.

KeyBanc analyst says, "We believe Acuity Brands is a great way for longer-term investors to play the LED upgrade cycle (increasingly stringent regulatory environment, the Company’s push into the retrofit market, new technological advancements in lighting driving ASPs higher, etc.), but are downgrading shares to HOLD following the recent share price appreciation (up 46% since October 4, when it reported fiscal 4Q results...We would look to become more constructive on shares at a lower valuation and/or following increased confidence in Acuity’s ability to: 1) aggressively take share; 2) ramp LED revenue at corporate average margins; and/or 3) aggressively expand earnings via M&A and restructuring."

"We are raising our fiscal 2Q12 and FY12 EPS estimates by $0.08 and $0.33, respectively. Key revisions to our FY12 estimate include: 3% increase to sales (forecasting 7.5% organic growth in fiscal 2H12 vs. 4.5% before), -20 bps to GM (to 41.0%) and -90 bps to SD&A:Sales (excluding restructuring charge). For FY13, we forecast Acuity to earn $3.90 (6% sales growth and 20% EPS growth; leverage primarily coming from improved SD&A leverage)."

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 $54.94 yesterday.

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