Acquity Stock Falls Ahead Of Q2 Earnings — But Retail Gets More Bullish

• AYI is set to report quarterly results on Thursday morning.
• Wall Street expects earnings of $4 per share, compared to $4.69 last quarter
• Stocktwits sentiment for ‘AYI’ jumped to ‘extremely bullish’ from ‘bullish’ one day ago.

Retail sentiment for Acquity Brands Inc. climbed sharply higher even as the industrial technology company fell nearly 1% overnight heading into Thursday after a three-day winning streak, ahead of its second-quarter earnings report.

In AYI’s first quarter report, CEO Neil Ashe reaffirmed that both AYI’s Acuity Brands Lighting (ABL) and Acquity Intelligent Spaces (AIS) businesses are “performing well in a challenging market.” Ashe added that AYI continues to experience a tepid lighting market as it appears to be waiting for clarity around interest rates, inflation, and policy. “We continue to control what we can control, and we are confident in the long-term performance of both the lighting and spaces businesses,” he said.

Wall Street Expects Lower Q2 EPS, Revenue

Fiscal.ai estimates second-quarter revenue at $1.08 billion, down from $1.14 billion in the previous quarter, a decline of about 5%. Meanwhile, earnings per share are expected to be $4, down from $4.69 last quarter. Earnings before interest, tax, depreciation, and amortization (EBITDA) are projected at $187.45 million compared with $211.2 million last quarter. 

According to Koyfin data, analysts' price targets for Acquity Brands range from $ 320 to $ 435, with a 12-month average price target of $383.38. This suggests a potential upside of 34% from the stock’s last close. Consensus rating leans towards ‘Buy, with four analysts assigning a 'Buy' rating, four a 'Hold', two a 'Strong Buy’, based on coverage from ten analysts.

Last week, Baird maintained AYI’s ‘neutral’ rating but cut price target to $320 from $375, citing modest volume deceleration in lighting.

Earlier this month, Wells Fargo maintained AYI’s ‘overweight’ rating but cut the price target to $370 from $385. The firm noted that nonresidential activity remains pressured, and uncertainty headwinds persist in project activity. However, Wells Fargo sees compelling upside for AYI as nonresidential recovers and the second-half-of-the-year seasonal lift materializes.

How Do Retail Traders Feel About AYI?

On Stocktwits, sentiment around AYI jumped to ‘extremely bullish’ from ‘bullish’ one day ago, amid ‘high’ message volumes. Engagement on the platform also surged: AYI stock’s message volumes spiked 600% over the last year.

One bullish user said, “$AYI has beaten earnings estimates for 22 consecutive quarters, 22, with an average surprise of 8% over the last year!”

Another user cited market commentator Jim Cramer’s remarks that Acuity Brands’ slump is tied to the slowdown in housing and construction, an industry where “there’s very little hope in acceleration.”

Year-to-date, AYI stock has declined 20%

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