Oppenheimer Cuts Price Target on Acuity Brands (AYI) Following 1Q EPS Miss

Oppenheimer maintained an Outperform rating on Acuity Brands (NYSE: AYI), and cut the price target to $265.00 (from $295.00), following the company's 1Q earnings report. AYI reported adjusted EPS of $2.00 missing the consensus estimate of $2.15.

Analyst Christopher Glynn commented, "AYI's revenue miss reflected a sudden sharp fall in shorter cycle small project business in mid-October that hasn't yet rectified, but based on pattern from 2012 (demonstrable) and less so during 2014 mid-terms, AYI expects reversion to volume trends seen before organic volume growth decelerated to 10%. FY2Q, the seasonally slower quarter, faces a tougher y-o-y comparison, so validation of expectation for re-acceleration may hinge more on orders trends than headline FY2Q results we speculate. Separate from expecting favorable reversion in demand trends, AYI still expects mid-high 20%s incremental margins for FY17 (higher in FY2H), not contingent on re-acceleration, but as supply chain and production efficiencies resulting from recent efforts to ramp scale are absorbed and sized."

For an analyst ratings summary and ratings history on Acuity Brands click here. For more ratings news on Acuity Brands click here.

Shares of Acuity Brands closed at $202.51 yesterday.

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