Acuity Brands, Inc. (NYSE:AYI) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 7.0% to hit US$900m. Acuity Brands also reported a statutory profit of US$2.37, which was an impressive 21% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.NYSE:AYI Earnings and Revenue Growth July 3rd 2021
After the latest results, the eight analysts covering Acuity Brands are now predicting revenues of US$3.50b in 2022. If met, this would reflect a satisfactory 4.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 12% to US$8.51. Before this earnings report, the analysts had been forecasting revenues of US$3.46b and earnings per share (EPS) of US$8.42 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$189, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Acuity Brands at US$206 per share, while the most bearish prices it at US$152. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Acuity Brands is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Acuity Brands' growth to accelerate, with the forecast 3.4% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Acuity Brands is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Acuity Brands analysts - going out to 2023, and you can see them free on our platform here.
You still need to take note of risks, for example - Acuity Brands has 2 warning signs we think you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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