Goldman Sachs maintained a Neutral rating on Acuity Brands (NYSE: AYI) and reduced its price target to $128.00 (from $135.00). The change follows Q3 results. Analyst Brian Lee sees risk/reward as balanced.

"Acuity’s 3QFY14 (May) results missed our estimates as expectations of a volume recovery following a weather-impacted 2Q failed to materialize. 3QFY14 revenue/non-GAAP EPS of $604mn/$1.00 was below our $625mn/ $1.16 as volume growth of +13% yoy came in below our +17% estimate. The EPS miss was driven primarily by lower revenue, with price/mix and forex a combined 1.5% headwind, while higher SG&A led to an operating margin of 11.9%, 170bp below our estimate. We lower our FY2014E/15E/
16E EPS by 7%/7%/2% to $3.97/$5.06/$6.16 on lower revenue and higher opex, which reduces our 12m price target by 5% to $128 (from $135 prior)," said analyst Brian Lee.

"While Acuity highlighted an expanding TAM for networked lighting solutions – specifically a $1bn opportunity for next generation drivers – we believe a more robust non-resi recovery is required for the stock to move higher in the near term, which may still be several quarters out given a still-tepid recovery and lighting’s typical 9-month lag. With Acuity trading at 23X CY2015E EPS, we see risk/reward as more balanced at current levels," he said.

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Shares of Acuity Brands closed at $117.62 yesterday.