Will Upgrade Help Acuity Brands (AYI) Stock On Thursday?

NEW YORK (TheStreet) -- Acuity Brands (AYI) has been upgraded to "buy" from "hold" at Canaccord Genuity based on its growing TAM and earnings power.

The firm has a $172.00 price target on the stock from $128.

Acuity Brands provides lighting solutions for commercial, institutional, industrial, infrastructure, and residential applications. 

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TheStreet Ratings team rates ACUITY BRANDS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ACUITY BRANDS INC (AYI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 19.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, AYI has a quick ratio of 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ACUITY BRANDS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ACUITY BRANDS INC increased its bottom line by earning $2.94 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($4.17 versus $2.94).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 70.5% when compared to the same quarter one year prior, rising from $26.10 million to $44.50 million.
  • Net operating cash flow has significantly increased by 399.31% to $43.40 million when compared to the same quarter last year. In addition, ACUITY BRANDS INC has also vastly surpassed the industry average cash flow growth rate of 2.15%.
  • You can view the full analysis from the report here: AYI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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