NEW YORK (TheStreet) -- After hitting an all-time high on Thursday following first-quarter results, Acuity Brands (AYI) has scored a ratings upgrade from Wedbush Securities. The investment firm upgraded the stock to "neutral" from "underperform" and allocated a $120 price target.
The Atlanta-based electronics manufacturer, which makes Lithonia Lighting, Holophane and Gotham brand products, reported a revenue increase of 20% year-over-year to $574.7 million. Net income jumped 39% to 96 cents a share, well above estimates of 84 cents. The company noted year-over-year growth in the first quarter was due "primarily to an increase in volume, partially offset by an estimated 1 percentage point net unfavorable change in product prices and mix of products sold."
Acuity also closed two small production facilities in the first quarter in keeping with restructuring plans begun in 2013 to cut costs. The company estimated that it saved $3 million pre-tax thanks to the streamlining maneuvers.
Acuity CEO Vernon Nigel said in the statement that the company's outlook remains positive.
"Third-party forecasts and leading indicators continue to suggest that the growth rate for the North American lighting market, which includes renovation and retrofit activity, will continue to be in the mid-single digit range during 2014."
The stock closed 12.2% higher to $123.50.
TheStreet Ratings team rates Acuity Brands Inc as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate ACUITY BRANDS INC (AYI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."