Acuity Brands, Inc. (NYSE:AYI) has inked a strategic alliance agreement with Ushio America for its Care222 UV disinfection module.

The supply agreement represents a “truly promising value proposition” for Acuity Brands, according to Oppenheimer.

The Acuity Brands Analyst: Christopher Glynn upgraded Acuity Brands from Perform to Outperform and set a $135 price target. 

Ushio America’s patented filtering technology provides a solution that is proven to kill viruses and bacteria. While Care222 is being tested for COVID-19, it’s considered a mere formality, the analyst said. 

In North America, the supply agreement is exclusive to Acuity Brands. As volume and production expands, unit prices will decline, and this will boost adoption, he said

Initial profitability is likely to be “around or slightly above” the average of the company’s other products, Glynn said. 

Acuity Brands has a strong balance sheet and enjoys a long-term strategic leadership position, the analyst said. 

Oppenheimer raised its earnings estimate for fiscal 2021 from $7.60 per share to $7.90 per share.

AYI Price Action: Shares of Acuity Brands were up 6.28% at $114.97 at the time of publication Monday. 

Related Links:

Recap: Acuity Brands Q2 Earnings

64 Biggest Movers From Yesterday