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Acuity Brands
(NYSE:AYI)
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Rating:76Outperform
Price Target:
$406.00
▲(38.74% Upside)
Action:Reiterated
Date:06/26/26
AYI scores well primarily on strong financial performance (healthy margins, solid balance sheet, and strong free cash flow) and a positive earnings update highlighting AIS strength and continued capital returns. The technical setup remains constructive but looks somewhat stretched (RSI > 70), while valuation is only fair given a mid-20s P/E and minimal dividend yield.
Positive Factors
High‑margin Intelligent Spaces (AIS)
AIS is a structurally higher‑margin, faster‑growing segment that now contributes materially to results. Sustained AIS growth and 25%+ operating margins shift the company mix toward software/solutions and services, supporting durable margin expansion, recurring revenue potential, and improved resilience versus pure fixture sales.
Negative Factors
ABL revenue decline & margin compression
The legacy lighting business remains cyclical and showed year‑over‑year revenue and operating profit declines. Persistent softness in ABL could constrain company‑wide top‑line growth and requires AIS to materially outgrow ABL to drive sustained overall revenue and margin improvement over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High‑margin Intelligent Spaces (AIS)
AIS is a structurally higher‑margin, faster‑growing segment that now contributes materially to results. Sustained AIS growth and 25%+ operating margins shift the company mix toward software/solutions and services, supporting durable margin expansion, recurring revenue potential, and improved resilience versus pure fixture sales.
Read all positive factors
Acuity Brands Key Performance Indicators (KPIs)
Any
Revenue by Segment
Reveals how different parts of the business contribute to total sales, highlighting strengths and potential growth areas within the company’s operations.
Reveals how different parts of the business contribute to total sales, highlighting strengths and potential growth areas within the company’s operations.
Data provided by:
The Fly
The FlyAcuity Brands (AYI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.87B
Dividend Yield0.18%
Average Volume (3M)464.69K
Price to Earnings (P/E)21.7
Beta (1Y)1.11
Revenue Growth10.50%
EPS Growth18.92%
CountryUS
Employees13,200
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)15.45
Shares Outstanding29,935,547
10 Day Avg. Volume568,590
30 Day Avg. Volume464,691
Financial Highlights & Ratios
PEG Ratio-4.19
Price to Book (P/B)3.70
Price to Sales (P/S)2.32
P/FCF Ratio18.90
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue2.13
Enterprise Value/Gross Profit4.31
Enterprise Value/Ebitda12.33
Forecast
1Y Price Target
$392.00Price Target Upside33.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)19.81
Revenue Forecast (FY)$4.65B
Acuity Brands Business Overview & Revenue Model
Company Description
Acuity Brands, Inc. operates as a global provider of advanced lighting and building management solutions, serving markets both within North America and internationally. The company's operations are divided into two principal segments: Acuity Brand...
How the Company Makes Money
Acuity Brands makes money primarily by selling products and solutions through two main segments. (1) Acuity Brands Lighting (ABL) generates revenue from the sale of lighting fixtures and related components (e.g., LED luminaires) and lighting contr...
Acuity Brands Earnings Call Summary
Earnings Call Date:Jun 25, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Oct 07, 2026
Earnings Call Sentiment Positive
The call highlights solid execution across the company with meaningful strength in AIS (15% sales growth, strong margin expansion) and continued cash generation and disciplined capital deployment. ABL shows resilient margins but experienced a modest revenue decline and lower operating profit versus prior year. Management reported product innovation, award recognition, and market share gains (notably Distech), while noting inflationary pressures, supply risks, and earlier-season order softness that are normalizing. Overall, positive operational trends and financial flexibility appear to outweigh the near-term headwinds.Positive Updates
Total Net Sales and EPS Growth
Total net sales of $1.2 billion, up $19 million or 2% year-over-year. Adjusted diluted EPS of $5.31, up $0.19 or 4% versus prior year, reflecting higher profitability and fewer diluted shares.
Negative Updates
ABL Revenue Decline and Operating Profit Compression
ABL sales of $905 million decreased $18 million or 2% year-over-year (challenging comparison to accelerated orders in Q3 2025). Adjusted operating profit declined $9 million to $165 million and ABL operating margin fell 60 basis points to 18.2%, driven largely by lower sales.
Read all updates
Q3-2026 Updates
Positive
Negative
Total Net Sales and EPS Growth
Total net sales of $1.2 billion, up $19 million or 2% year-over-year. Adjusted diluted EPS of $5.31, up $0.19 or 4% versus prior year, reflecting higher profitability and fewer diluted shares.
Read all positive updates
Company Guidance
Management didn’t provide formal numeric forward guidance but gave clear directional guidance and many operating metrics: Q3 net sales were $1.2B (+$19M, +2% y/y), adjusted gross margin 50.1% (+10 bps), adjusted operating profit $224M (18.7% margin) and adjusted diluted EPS $5.31 (+$0.19, +4%); ABL Q3 sales $905M (‑$18M, ‑2%; two‑year stacked +1%; independent+direct +4%), ABL adjusted gross margin 46.1% with adjusted operating profit $165M (18.2% margin) after adjusting out a $6.4M tariff refund; AIS Q3 sales $304M (+$39M, +15%), AIS adjusted gross margin 60.3% and adjusted operating profit $76M (25.1% margin, +150 bps). They reported $520M cash from operations YTD (+$121M y/y), refinanced with a new $800M five‑year revolver, repaid $200M of term debt YTD, repurchased ~766,000 shares for $230M (including ~500,000 this quarter at $281 avg), and increased the quarterly dividend by 18%. Looking ahead management said lighting demand is “firming,” expects a normal sequential Q4 increase (perhaps less steep than prior years), anticipates demand to firm over the next four quarters, and expects AIS to continue outgrowing the business and expanding margins with acquisitions prioritized to build AIS—all signaling confidence in continued margin and cash‑flow expansion rather than issuing specific numeric FY guidance.Acuity Brands Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
78
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.61B | 4.35B | 3.84B | 3.95B | 4.01B | 3.46B |
| Gross Profit | 2.27B | 2.08B | 1.78B | 1.71B | 1.67B | 1.48B |
| EBITDA | 794.90M | 655.30M | 665.00M | 588.50M | 603.20M | 520.50M |
| Net Income | 472.30M | 396.60M | 422.60M | 346.00M | 384.00M | 306.30M |
Balance Sheet | ||||||
| Total Assets | 4.64B | 4.76B | 3.81B | 3.41B | 3.48B | 3.58B |
| Cash, Cash Equivalents and Short-Term Investments | 411.90M | 422.50M | 845.80M | 397.90M | 223.20M | 491.30M |
| Total Debt | 804.30M | 1.00B | 573.50M | 590.80M | 596.10M | 556.90M |
| Total Liabilities | 1.78B | 2.03B | 1.44B | 1.39B | 1.57B | 1.53B |
| Stockholders Equity | 2.85B | 2.72B | 2.38B | 2.02B | 1.91B | 2.04B |
Cash Flow | ||||||
| Free Cash Flow | 639.40M | 533.00M | 555.20M | 511.40M | 259.80M | 364.90M |
| Operating Cash Flow | 722.70M | 601.40M | 619.20M | 578.10M | 316.30M | 408.70M |
| Investing Cash Flow | -89.60M | -1.28B | -65.10M | -90.70M | -62.20M | -117.90M |
| Financing Cash Flow | -598.90M | 255.40M | -104.50M | -312.90M | -512.40M | -362.60M |
Acuity Brands Technical Analysis
Positive
292.63
Price Trends
307.17
Positive
295.43
Positive
322.25
Positive
Market Momentum
12.53
Positive
53.06
Neutral
23.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AYI, the sentiment is Positive. The current price of 292.63 is below the 20-day moving average (MA) of 328.74, below the 50-day MA of 307.17, and below the 200-day MA of 322.25, indicating a bullish trend. The MACD of 12.53 indicates Positive momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 23.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AYI.
Acuity Brands Risk Analysis
Acuity Brands disclosed 25 risk factors in its most recent earnings report. Acuity Brands reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Acuity Brands Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $7.28B | 26.31 | 15.60% | 0.67% | 3.70% | -14.17% | |
78 Outperform | $25.03B | 51.99 | 13.36% | 0.84% | 34.18% | -15.12% | |
77 Outperform | $8.45B | 45.91 | 28.61% | 0.32% | 4.50% | 7.18% | |
76 Outperform | $9.87B | 21.66 | 15.71% | 0.18% | 10.50% | 18.92% | |
66 Neutral | $11.17B | 61.12 | 14.35% | 0.18% | 22.19% | 157.87% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | $2.33B | ― | -8.68% | 2.02% | -3.36% | -168.34% |
* Industrials Sector Average
AYI
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Acuity Brands Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Acuity Brands Secures New $800 Million Revolving Credit Facility
Positive
May 13, 2026
On May 8, 2026, Acuity Inc. entered into a new unsecured revolving credit agreement with a syndicate of lenders led by JPMorgan Chase Bank, N.A., providing up to $800 million in borrowing capacity and maturing in May 2031. The facility, guaranteed...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.