Acuity Brands, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

The quarterly results for Acuity Brands, Inc. (NYSE:AYI) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of US$906m were in line with what the analysts predicted, Acuity Brands surprised by delivering a statutory profit of US$2.84 per share, modestly greater than expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Acuity Brands after the latest results.

See our latest analysis for Acuity Brands

Taking into account the latest results, Acuity Brands' ten analysts currently expect revenues in 2024 to be US$3.90b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 9.1% to US$13.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.87b and earnings per share (EPS) of US$12.98 in 2024. So the consensus seems to have become somewhat more optimistic on Acuity Brands' earnings potential following these results.

The consensus price target rose 9.2% to US$277, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Acuity Brands analyst has a price target of US$322 per share, while the most pessimistic values it at US$230. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 2.4% growth on an annualised basis. That is in line with its 2.8% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.9% annually. So although Acuity Brands is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Acuity Brands following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Acuity Brands. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Acuity Brands going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Acuity Brands that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.