Acuity Brands designs, produces, and distributes lighting solutions, components, and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally. The company was founded in 2001 and is founded in Atlanta, Georgia.
AYI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for AYI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Acuity Brands Inc ranked in the 72th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 221.5%. As for the metrics that stood out in our discounted cash flow analysis of Acuity Brands Inc, consider:
The company's balance sheet shows it gets 88% of its capital from equity, and 12% of its capital from debt. Notably, its equity weight is greater than 79.66% of US equities in the Industrials sector yielding a positive free cash flow.
The business' balance sheet suggests that 12% of the company's capital is sourced from debt; this is greater than merely 24.71% of the free cash flow producing stocks we're observing.
AYI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 36.71% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as AYI, try QUAD, GV, NL, B, and HXL.
Acuity Brands, Inc. (AYI) Q3 2020 Earnings Conference Call June 30, 2020 10:00 A.M. ET Company Participants Pete Shannin - Vice President, Investor Relations and Corporate Development Neil Ashe - President and Chief Executive Officer Karen Holcom - Senior Vice President and Chief Financial Officer Richard Reece - Executive Vice...