Acuity Brands: Q4 Earnings, Updates To DCF And WACC Indicate A Hold Rating


  • Acuity Brands Q4 earnings included growth in revenue, net income, earning expectation wins, share repurchases, and a maintained dividend.
  • Cash flow was $316 million, which is down $92 from last year.
  • Updates to WACC and DCF assumptions show a fair value of $147, dropping a previously “Strong Buy” rating to a “Hold”.
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Though a relatively strong Q4 earnings performance, a lack of cash flow and new Weighted Average Cost of Capital (“WACC”) and Discounted Cash Flow (“DCF”) assumptions indicate a “Hold” for AYI, after I previously rated it a “Strong Buy”.

Disclosure: I/we have a beneficial long position in the shares of AYI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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