Acuity Inc (AYI) Has Strong Upside Despite Target Price Cut

Acuity Inc. (NYSE:AYI) is one of the 10 most undervalued industrial stocks to buy according to analysts. Christopher Snyder from Morgan Stanley cut Acuity Inc.’s (NYSE:AYI) price target from $425 to $410 on January 12. However, he kept his Buy rating on the stock. The analyst noted that the company delivered fiscal Q1 EPS that surpassed expectations, and forward revisions remained unchanged. However, the shares dropped 13% following the report, mainly due to weaker-than-expected margins in the ABL segment. The decline also raised concerns about potential Q1 pull-forward effects and the company’s longer-term pricing power. Despite these short-term challenges, the analyst highlighted that the 13% pullback presents an attractive entry point for investors.

On January 9, financial services firm Baird also presented a similar sentiment about the stock. Baird analyst Timothy Wojs lowered the firm’s price target for the stock from $408 to $375 while reiterating a Buy rating. The analyst said the firm updated its financial model following modest upside in Acuity’s first-quarter results. Despite the slight positive surprise, Timothy noted that expectations for the quarter were higher, prompting a revision to the price target.

Acuity Inc. (NYSE:AYI) operates as a provider of building management systems, lighting, lighting controls, and an audio, video, and control platform. The company operates through the Acuity Intelligent Spaces (AIS) and the Acuity Brands Lighting (ABL) segments.

While we acknowledge the potential of AYI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.