William Blair analyst Ryan Merkel has reiterated their bullish stance on AYI stock, giving a Buy rating on September 23.
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Ryan Merkel has given his Buy rating due to a combination of factors including Acuity Brands’ positive guidance and potential for margin improvement. The company’s guidance for sales and earnings per share is above expectations, suggesting a positive outlook despite a challenging macroeconomic environment. The anticipated EBIT margins of 17%-18% by fiscal 2026 are seen as achievable, especially considering the company’s current margin performance.
Although there was a slight sales miss, the better-than-expected gross margin and operating leverage indicate strong operational efficiency. The muted market demand due to high rates and tariff uncertainties is a concern, but Acuity’s ability to maintain higher gross margins and leverage productivity improvements in a low-growth market supports the Buy rating. The shift towards AIS and cost management strategies are expected to drive future margin recovery, reinforcing the positive outlook for the stock.
In another report released on September 23, Morgan Stanley also maintained a Buy rating on the stock with a $365.00 price target.
Based on the recent corporate insider activity of 20 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AYI in relation to earlier this year.