Acuity Brands upgraded at William Blair on margin opportunity

As previously reported, William Blair analyst Ryan Merkel upgraded Acuity Brands (AYI) to Outperform from Market Perform, citing an improved company-specific story and upside to estimates given sustainable gross margins following “impressive” management execution. Gross margins surprised over the past year despite a tough market and the firm expects outperformance to continue in 2025 due to “product vitality,” entry into new markets and the pending acquisition of QSC, which brings with it higher margins. The firm believes gross margins can rise to 47% in 2026, the analyst tells investors.