Acuity Brands Inc. (NYSE: AYI) has confirmed the release date for fiscal Q1 2022 earnings results which will be on Friday, January 7, 2022, before market open.
What to look for
Earnings: Stockearning’s Estimated EPS for fiscal Q1 2022 is expected to be around $2.21. In the fourth, the company had diluted EPS of $2.72, representing a YoY increase of 45.5%, with adjusted diluted EPS of $3.27 per share representing a YoY increase of 39.1%. Historical EPS Performance for the past 12 months indicated that the company has topped estimates eight times (66%) and missed three times (25%).
Revenue: For fiscal Q1 2022, the company expects revenue of $895.5 million, representing a YoY increase of 13.1% from $792 million a year ago. In the fourth quarter, the company had net sale of $992.7 million, representing a YoY increase of 11.4%. Gross profit in Q4 2021 was up 11.8% to $419.3 million, and it was 42.2% of net sales.
Stock movement: Acuity Brands shares have gained 20.8% since the company released its last quarter earnings. Notably, AYI shares have been DOWN 24 times out of the past 46 quarters. So, the historical price reaction suggests a 52% probability of the share price going DOWN once the company reports its fiscal Q1 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 7%, while the predicted move on the seventh day is 9%.
What analysts are saying
Credit Suisse analyst John Walsh, who maintains a Buy rating on the stock, has lifted acuity Brands’ price target from $225 to $237. The analyst maintains his above-consensus EPS forecast for fiscal 2022 but changes his quarterly gross profit cadence to be more weighted toward the second half of the year. His revised prediction more fully reflects the sector's wide supply chain challenges in September that were not reflected in the company's Q4 earnings. As a result, Walsh believes that the stock should be traded based on an increased forecast for the 2H 2022 and 2023, rather than a quarter that incorporates September data.
UBS analyst Chris Snyder upgraded Acuity Brands to Hold from Sell and raised his price target on the stock from $163 to $206. Snyder told investors in a research note that Acuity is demonstrating a higher degree of gross margin "resiliency" than in earlier cycles of cost inflation, leading to a more resilient firm. This, according to the analyst, is good news for the company's earnings and valuation.
Wells Fargo analyst Joseph O'Dea commenced coverage on Acuity Brands with a Buy rating and a price target of $218. Despite a subdued gross margin expectation, O'Dea believes Acuity's capital deployment will deliver EPS growth over the next three years and doesn't see the stock as a "value trap." O'Dea also expects the firm to continue improving adjusted operating margins.
Also, Cowen analyst Jeffrey Osborne has lifted Acuity Brands’ price target from $184 to $223 but maintains a buy rating on the stock. According to the analyst, the company's revenue forecast for 2022 exceeded previous projections, and gross margins appear to be stable given the recent price rise.
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