Will Acuity Brands (USA Stocks:AYI) investors continue to trust the experts consensus?

AYI Stock

USD 191.57 0.00 0.00%

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Acuity Brands is scheduled to announce its earnings tomorrow. Because some millenniums are getting more into electrical equipment space, we are going to concentrate on the feasibility of inclusion Acuity into your portfolio. We will examine the reasons why it is still possible for the company to generate above-average margins given the current economic outlook.

Published over three weeks ago

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Acuity Brands is UNDERVALUED at 178.35 per share with modest projections ahead.

Macroaxis provides advice on Acuity Brands to complement and cross-verify current analyst consensus on Acuity Brands. Our investment recommendation engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.

Will Acuity Brands (USA Stocks:AYI) investors continue to trust the experts consensus?

What is the right price you would pay to acquire a share of Acuity Brands? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated.

Please read more on our stock advisor page.

What is happening with Acuity Brands this year

Annual and quarterly reports issued by Acuity Brands are formal financial statements that are published yearly and quarterly and sent to Acuity stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934.

Companies such as Acuity Brands often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How does Acuity utilize its cash?

To perform a cash flow analysis of Acuity Brands, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Acuity Brands is receiving and how much cash it distributes out in a given period. The Acuity Brands cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Acuity Brands Net Cash Flow from Operations is increasing as compared to previous years. The last year's value of Net Cash Flow from Operations was reported at 284.67 Million

Acquisition by Mary Winston of tradable shares of Acuity Brands subject to Rule 16b-3

Legal trades by Acuity Brands insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

Acuity insider trading alert for grant of common stock by Mary Winston, the corporate stakeholder, on 15th of December 2022. This event was filed by Acuity Brands Inc with SEC on 2017-04-03. SEC Form: Changes in beneficial ownership [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Details

Earning per share calculations of the firm is based on official Zacks consensus of 4 analysts regarding Acuity Brands' future annual earnings. Given the historical accuracy of 89.68%, the future earnings per share of the company is estimated to be 11.04 with the lowest and highest values of 10.71 and 11.36, respectively. Please note that this consensus of annual earnings estimates for Acuity Brands is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Acuity a risky opportunity?

Let's check the volatility. Acuity is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Acuity (USA Stocks:AYI) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. locking in a share of an Acuity Brands stock makes you a part-owner of that company.

Acuity Brands Current Consensus

Here is the current trade recommendation based on an ongoing consensus estimate among financial analysis covering Acuity Brands. The Acuity consensus assessment is calculated by taking the average estimates from all of the analysts covering Acuity Brands

Strong Buy

Hold

Strong Buy	5	71.43
Buy	0	0.0
Hold	2	28.57
Sell	0	0.0
Strong Sell	0	0.0

Will Acuity pull back in February 2023?

Downside deviation is down to 2.41. It may hint to a possible volatility drop.

As of the 8th of January, Acuity Brands shows the Risk Adjusted Performance of 0.0296, downside deviation of 2.41, and Mean Deviation of 1.85. Acuity Brands technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We have analyzed and interpolated nineteen technical drivers for Acuity Brands, which can be compared to its rivals. Please confirm Acuity Brands variance, value at risk, as well as the relationship between the Value At Risk and skewness to decide if Acuity Brands is priced correctly, providing market reflects its regular price of 169.76 per share. Given that Acuity Brands has jensen alpha of (0.19), we suggest you to validate Acuity Brands's prevailing market performance to make sure the company can sustain itself at a future point.

The Bottom Line

While many of the other players within the electrical equipment & parts industry are still a little expensive, even after the recent corrections, Acuity Brands may offer a potential longer-term growth to stockholders. The bottom line, as of the 8th of January 2023, our final 90 days 'Buy-Sell' recommendation on the company is Buy. We believe Acuity Brands is currently undervalued with very low probability of distress for the next two years.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Acuity Brands. Please refer to our Terms of Use for any information regarding our disclosure principles.

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