Analysts Optimistic About Acuity Brands: Margin Expansion And Supply Chain Improvements To Drive Growth

Oppenheimer analyst Christopher Glynn reiterated an Outperform rating on Acuity Brands, Inc. AYI with a price target of $210.
The analyst noted that the company would gain from significant structural supply chain improvements, supporting its margins, which will drive further the second half of the fiscal year.
Strategic pricing and runway on favorable input cost trends are also expected to reinforce further clarity for gross margins.
The company will also benefit from improving supplier network productivity and data utilization into demand and production, retaining a "meaningful process improvement runway."
Volumes into distribution for reselling will continue to see solid growth and sell-through, with a healthy share traction in channel inventory continuing.
However, quickly normalizing lead times may contribute substantially to slowing orders, resulting in some project-dedicated inventory work-down in the channel.
The analyst revised FY23E EPS to $13.50 from $13.80 and for FY24 to $11.60 from $14.95.
Price Action: AYI shares are trading lower by 0.09% at $158.32 on the last check Tuesday.

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