HUBB - Acuity Brands: Good Prospects But Moving To The Sidelines On Valuations

2024-07-07 01:39:43 ET

Summary

• Acuity Brands, Inc. is expected to grow revenue due to a healthy backlog, expansion into new verticals, and product innovation.
• Margins to benefit from operating leverage, product vitality, and margin-accretive acquisitions, with full integration of Optotronics business contributing.
• The company's revenue and margin growth prospects are positive, but the current valuation is in line with historical averages, leading to a neutral rating.

Investment Thesis

Acuity Brands, Inc. ( AYI ) should deliver good revenue growth in the coming quarters thanks to its healthy backlog and improved order pipeline in the infrastructure business. Further, the company’s revenue growth should benefit from its expansion into new verticals like refueling stations and horticulture. In addition, the company’s focus on product vitality and innovation should contribute to volume growth and improve pricing/mix....

For further details see: