AYI - Acuity's Data Analytics And Lightning Technologies May Imply 45% Upside Potential

• Acuity Brands, Inc. presents itself as an industrial technology offering building management systems, lighting, and location-aware applications.
• I expect the management to be sufficiently smart to create a competitive cost structure and improve productivity and cost-effective lighting solutions.
• I am quite optimistic about the company’s software applications and capabilities to enhance data analytics offerings.
• My figures include an increase in sales from $3.461 billion in 2021 to close to $4.301 billion in 2025. Capex would also grow from $43 million to close to $68 million, and the FCF would stand at $487 million in 2026. Finally, the FCF/Sales would be equal to 10%-11%.
• I also used an exit multiple of 23.5x because with better FCF margin and sales growth, in the future, traders will pay more for the company’s shares. With net debt of -$95 million, 35 million shares, and 2027 FCF close to $635 million, the result is a target price of $300.

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