Oppenheimer Cuts Price Target on Acuity Brands (AYI) Following 1Q EPS Miss
Oppenheimer maintained an Outperform rating on Acuity Brands (NYSE: AYI), and cut the price target to $265.00 (from $295.00), following the company's 1Q earnings report. AYI reported adjusted EPS of $2.00 missing the consensus estimate of $2.15.
Analyst Christopher Glynn commented, "AYI's revenue miss reflected a sudden sharp fall in shorter cycle small project business in mid-October that hasn't yet rectified, but based on pattern from 2012 (demonstrable) and less so during 2014 mid-terms, AYI expects reversion to volume trends seen before organic volume growth decelerated to 10%. FY2Q, the seasonally slower quarter, faces a tougher y-o-y comparison, so validation of expectation for re-acceleration may hinge more on orders trends than headline FY2Q results we speculate. Separate from expecting favorable reversion in demand trends, AYI still expects mid-high 20%s incremental margins for FY17 (higher in FY2H), not contingent on re-acceleration, but as supply chain and production efficiencies resulting from recent efforts to ramp scale are absorbed and sized."
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Shares of Acuity Brands closed at $202.51 yesterday.