Company Overview - Acuity Brands Lighting (ABL) net sales were $3612 million in FY25 and $3621 million in LTM Q1'26[46] - Acuity Intelligent Spaces (AIS) net sales were $764 million in FY25 and $948 million in LTM Q1'26[47] Financial Performance - The company's net sales have grown from $17 billion in FY09 to $4538 billion in LTM Q1'26[34, 42] - Adjusted operating profit increased from $196 million in FY09 to $806 million in LTM Q1'26[35, 42] - Adjusted diluted earnings per share increased from $274 in FY09 to $1873 in LTM Q1'26[37] - Free cash flow increased from $72 million in FY09 to $534 million in LTM Q1'26[38, 44] Capital Allocation - The company has repurchased approximately $15 billion of its shares outstanding from the beginning of the 4th quarter of 2020, representing approximately 25% of the then-outstanding shares[31] ABL Performance - ABL Adjusted Operating Profit was $662 million in FY25 and $669 million in LTM Q1'26[23, 46] - ABL Adjusted Operating Profit Margin was 183% in FY25 and 185% in LTM Q1'26[23, 46] AIS Performance - AIS Adjusted Operating Profit was $164 million in FY25 and $206 million in LTM Q1'26[28, 47] - AIS Adjusted Operating Profit Margin was 215% in FY25 and 217% in LTM Q1'26[28, 47]

Core Insights - Acuity Brands, Inc. (AYI) is set to announce its first-quarter fiscal 2026 results on January 8, with expectations of year-over-year growth in both earnings and revenues supported by strong performance in its segments [1][3][8] Financial Performance - In the last reported quarter, adjusted earnings exceeded the Zacks Consensus Estimate by 10.6% and increased by 20.9% year over year, while revenues grew by 17.2% but missed the consensus by 0.3% [1] - The Zacks Consensus Estimate for the upcoming quarter's earnings per share (EPS) is $4.45, reflecting a 12.1% increase from $3.97 in the same quarter last year, with revenues expected to reach $1.13 billion, a 19.2% increase year over year [2][8] Segment Analysis - The Acuity Brands Lighting (ABL) segment, which contributed 83.1% to fiscal 2025 net sales, is projected to see revenues rise by 2.6% year over year to $909.3 million, although demand conditions are described as tepid [5] - The Acuity Intelligent Spaces (AIS) segment is expected to experience significant growth, with revenues forecasted to surge by 219.8% year over year to $235.1 million, driven by organic growth from products like Atrius, Distech, and QSC [9] Strategic Initiatives - The company is focusing on developing market-leading solutions and expanding its healthcare portfolio, with new product launches such as the Care Collection and Nightingale range contributing to its performance [4] - Management has implemented permanent restructuring and operating expense actions to maintain a leaner cost base, which is expected to help offset softer volumes and seasonal effects [6] Cost Management and Profitability - Cost-control actions, organizational optimization, and productivity gains are anticipated to support profitability despite challenges from higher tariff costs [10] - The adjusted EBITDA margin is expected to increase to 18.1% in the fiscal first quarter from 18% a year ago, indicating improved operational efficiency [12]

Core Viewpoint - Acuity (AYI) has shown strong stock performance, reaching a new 52-week high and outperforming the broader market and sector averages [1][2]. Financial Performance - Acuity has consistently beaten earnings estimates, reporting EPS of $5.2 against a consensus of $4.7 in its latest earnings report [2]. - For the current fiscal year, Acuity is projected to achieve earnings of $19.76 per share on revenues of $4.77 billion, reflecting a 9.72% increase in EPS and a 9.68% increase in revenues [3]. - The next fiscal year forecasts earnings of $21.66 per share on revenues of $5.02 billion, indicating a year-over-year change of 9.62% in EPS and 5.35% in revenues [3]. Valuation Metrics - Acuity's stock trades at 19.1 times the current fiscal year EPS estimates, which is above the peer industry average of 16.6 times [7]. - On a trailing cash flow basis, the stock trades at 17.3 times compared to the peer group's average of 11.9 times [7]. - The stock has a PEG ratio of 1.91, which does not place it among the top value stocks [7]. Zacks Rank and Style Scores - Acuity holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, making it a suitable choice for investors [8]. - The stock has a Value Score of B, a Growth Score of B, and a Momentum Score of D, resulting in a combined VGM Score of B [6]. Industry Comparison - Acuity's performance is strong relative to its industry, with peers like Dave Inc. (DAVE) also showing positive trends, including a Zacks Rank of 1 (Strong Buy) and significant earnings growth [9][10]. - The Technology Services industry, while ranking in the bottom 65% of all industries, still presents favorable conditions for both Acuity and DAVE [11].

Core Viewpoint - Acuity Inc. is expected to report strong earnings growth in the upcoming first quarter, with analysts projecting earnings per share to rise to $4.59 from $3.97 year-over-year, alongside a significant revenue increase to $1.14 billion from $951.6 million [1]. Group 1: Earnings and Revenue Expectations - Acuity Inc. will release its first-quarter earnings results on January 8, 2025, with analysts forecasting earnings per share of $4.59, an increase of 15.6% from the previous year's $3.97 [1]. - The consensus estimate for quarterly revenue is $1.14 billion, reflecting a year-over-year growth of 19.5% from $951.6 million [1]. Group 2: Recent Performance and Market Reaction - On October 1, Acuity reported fourth-quarter net sales growth of 17.1% year-over-year, reaching $1.21 billion, although this fell short of the analyst consensus estimate of $1.23 billion [2]. - Following the earnings report, Acuity's shares increased by 0.9%, closing at $376.69 [2]. Group 3: Analyst Ratings and Price Targets - Morgan Stanley maintained an Overweight rating and raised the price target from $365 to $425 [3]. - Goldman Sachs kept a Neutral rating while increasing the price target from $312 to $356 [3]. - Wells Fargo maintained an Overweight rating and raised the price target from $380 to $405 [3]. - Oppenheimer maintained an Outperform rating and increased the price target from $380 to $435 [3]. - Baird maintained a Neutral rating and raised the price target from $335 to $360 [3].

Geopolitical Developments - The U.S. launched a military strike on Venezuela, extracting President Nicolás Maduro to face criminal charges in the U.S. [2] - President Trump stated that the U.S. would "run" Venezuela until an orderly transition is possible and that U.S. oil companies would rebuild Venezuela's oil infrastructure [2][3] Market Reactions - Investors are expected to closely monitor developments in Venezuela and seek more details from the Trump administration, particularly regarding the oil market, which may experience volatility [3] Employment and Economic Data - The Bureau of Labor Statistics is set to release the December jobs report, which could influence interest rates [6] - Federal Reserve officials indicated that a weakening labor market might lead to more interest rate cuts, with upcoming reports on job openings, private sector hiring, and jobless claims providing insights into the labor market [7] Corporate Earnings Reports - Applied Digital, a data center operator, will report on the AI industry, with investors looking for signals of strong AI spending [9] - Constellation Brands, Tilray Brands, Albertsons Companies, CalMaine Foods, and Simply Good Foods are among the companies reporting earnings this week, providing insights into consumer spending levels [10][11]

Core Viewpoint - Acuity (AYI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based solely on changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [1][2]. - A positive change in earnings estimates is strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4][6]. Company Performance and Investor Sentiment - The upgrade for Acuity suggests an improvement in the company's underlying business, which should encourage investors to drive the stock price higher [5]. - Over the past three months, the Zacks Consensus Estimate for Acuity has increased by 3%, with expected earnings of $19.76 per share for the fiscal year ending August 2026, unchanged from the previous year [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Acuity's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Viewpoint - Acuity Inc. is set to release its fiscal 2026 first-quarter results on January 8, 2026, with a conference call led by CEO Neil Ashe [1]. Company Overview - Acuity Inc. (NYSE: AYI) is a leading industrial technology company focused on solving problems related to spaces and lighting through innovative products and services [3]. - The company operates through two main segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS) [3]. Growth Strategy - Acuity aims to achieve growth by developing innovative products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform [4]. - The company emphasizes customer outcomes to drive growth and productivity, aiming to increase market share and deliver superior returns [4]. - Acuity plans to aggressively deploy capital to expand its business and enter attractive new verticals [4]. Operational Footprint - Acuity Inc. is headquartered in Atlanta, Georgia, and has operations across North America, Europe, and Asia, supported by approximately 13,000 associates [5].

Core Insights - Futures are rising, indicating a positive market sentiment, with notable gains in stocks like Marvell and American Eagle [1] - Acuity Brands is highlighted for its strong technical performance, achieving a Composite Rating of 95 out of 99 and showing support at converged 21-day and 50-day lines [1] - The stock market is experiencing a rebound, with Nasdaq leading the way and key stocks such as Snowflake and Acuity Brands being closely monitored [1][2] Company Performance - Acuity Brands has cleared a technical benchmark, achieving an 80-plus Relative Strength (RS) Rating, indicating strong market performance [4] - The stock is approaching a key technical benchmark, with a flat base pattern emerging, which is considered a positive sign in technical analysis [1][4] - Acuity Brands is part of a group of stocks showing improving market leadership, earning an RS Rating of 82 [4] Market Trends - Small-cap stocks are experiencing significant gains, with Acuity Brands and others like ESLT and BX in focus as they race higher after a breakout [4] - The overall market is showing signs of recovery, with the Nasdaq leading the rebound and various stocks, including Acuity Brands, being highlighted for their performance [1][2]

Core Viewpoint - Acuity (AYI) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to significant price movements based on their buying or selling actions [3]. Business Improvement Indicators - The upgrade in Acuity's rating suggests an improvement in the company's underlying business, which is expected to drive the stock price higher as investors recognize this trend [4]. Importance of Earnings Estimate Revisions - Research indicates a strong correlation between earnings estimate revisions and stock movements, making it beneficial for investors to track these revisions [5]. - The Zacks Rank system utilizes four factors related to earnings estimates to classify stocks, with a proven track record of generating substantial returns for top-rated stocks [6]. Current Earnings Estimates for Acuity - Acuity is projected to earn $19.75 per share for the fiscal year ending August 2026, with no year-over-year change, but analysts have raised their estimates by 4% over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of ratings, ensuring that only the top 20% of stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [8][9]. - Acuity's upgrade to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].

Core Insights - Investors in the Technology Services sector may consider Acuity (AYI) and SPX Technologies (SPXC) as potential value stocks [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] Valuation Metrics - AYI has a forward P/E ratio of 18.29, while SPXC has a forward P/E of 31.72, suggesting AYI may be more undervalued [5] - AYI's PEG ratio is 1.83, compared to SPXC's PEG ratio of 2.01, indicating AYI's expected earnings growth is more favorable relative to its valuation [5] - AYI's P/B ratio is 4.06, while SPXC's P/B ratio is 4.95, further supporting AYI's position as the superior value option [6] Value Grades - AYI has a Value grade of B, while SPXC has a Value grade of D, highlighting AYI's stronger valuation metrics [6]