UPDATE: Sterne Agee Maintains Underperform, Raises PT to #38 on Acuity Brands
Sterne Agee reiterates its Underperform rating on Acuity Brands (NYSE: AYI) and raises its target to $38 from $26 to reflect better operating leverage.
Sterne Agee notes, "We think the news out of the call will be viewed as POSITIVE given the: 1) revenue upside surprise ($474 million versus consensus of $464 million); 2) impressive 7% Y/Y unit growth (in a challenging construction spending environment); and 3) operating margin improvement (11.2% of sales, up 53 bps Y/Y, with incremental operating margins of 15.8%). Although reported EPS of $0.74 increased 32% versus $0.56 a year ago, the positive impact of $2.9 million in “other income” versus “other expense” of $1.2 million a year ago contributed $0.06 to EPS."
AYI closed at $54.94 per share on Monday.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.