Acuity Brands, Inc. (NYSE:AYI) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.0% to hit US$776m. Acuity Brands also reported a statutory profit of US$1.52, which was an impressive 39% above what the analysts had forecast. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week’s earnings report, Acuity Brands’ nine analysts are forecasting 2021 revenues to be US$3.34b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 2.2% to US$6.71 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$3.37b and earnings per share (EPS) of US$6.63 in 2021. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$102, suggesting that the company has met expectations in its recent result. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Acuity Brands, with the most bullish analyst valuing it at US$135 and the most bearish at US$50.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.0%, a significant reduction from annual growth of 5.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Acuity Brands is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Acuity Brands’ revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$102, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Acuity Brands going out to 2022, and you can see them free on our platform here..
We also provide an overview of the Acuity Brands Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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