UniFirst, Acuity Brands And 3 Stocks To Watch Heading Into Wednesday
AInvestWednesday, Jan 8, 2025 3:04 am ET
4min read
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As the market continues to evolve, investors are keeping a close eye on companies that demonstrate strong fundamentals and growth potential. Two notable players in the industrial and uniform services sectors, UniFirst Corporation (UNF) and Acuity Brands (AYI), have recently reported robust financial performances, indicating their potential for sustained growth. Additionally, three other stocks have caught investors' attention as they head into Wednesday's trading session. Let's delve into the key fundamentals and recent developments of these companies.

UniFirst Corporation (UNF) reported a 4.6% increase in overall revenues for the third quarter of fiscal year 2024, with Core Laundry Operations showing an organic growth of 4.7%. Operating income, EBITDA, and cash flow from operating activities all increased significantly, reflecting the company's strong financial position. UniFirst's outlook for the fiscal year 2024 remains unchanged, with revenues projected between $2.415 billion and $2.425 billion, and diluted earnings per share ranging from $7.17 to $7.49. The company's investments in new facilities and technology, as well as its focus on customer retention and value demonstration, contribute to its potential for sustained growth.

Acuity Brands (AYI) reported fiscal fourth-quarter 2024 net sales growth of 2.2% year over year to $1.03 billion, beating the analyst consensus estimate of $1.02 billion. Adjusted EPS of $4.30 also beat the analyst consensus estimate of $4.28. Sales by segments: Acuity Brands Lighting (ABL) and Lighting Controls revenue hit $955.0 million (+1.1% Y/Y), and Intelligent Spaces Group (ISG) clocked $83.9 million (+16.7% Y/Y). The consolidated adjusted operating margin grew by 120 bps to 17.3%. ABL's adjusted operating margin expanded by 120 bps to 18.0%. ISG's margin increased by 590 bps to 25.6%. Acuity Brands' strong financial performance aligns with its long-term growth strategy, focusing on innovation, technology, and expanding its product offerings.

Three other stocks to watch heading into Wednesday are:

1. Cintas Corporation (CTAS): Proposed to acquire UniFirst Corporation for $275.00 per share in cash, valuing the transaction at approximately $5.1 billion. The acquisition would allow Cintas to serve more customers and make greater use of its recent investments in technology and infrastructure. Cintas is a leading provider of corporate identity uniform programs, providing uniforms, facility services, and safety products to businesses. The proposed acquisition of UniFirst would strengthen Cintas' position in the uniform and facility services industry.
2. Newell Brands (NWL): A consumer goods company that has been active in share repurchases in recent years. With a large cash balance and a lower valuation compared to its peers, Newell Brands is well-positioned to continue its buyback activity, potentially driving shareholder value.
3. Discover Financial Services (DFS): A credit card issuer that has seen a significant drop in buyback activity in 2020 but has a large cash balance. As the U.S. economy continues to grow and borrowing costs remain low, Discover Financial Services could be set to go on a buyback binge, potentially boosting its share price.



In conclusion, UniFirst, Acuity Brands, and the three other stocks mentioned in this article have demonstrated strong fundamentals and growth potential, making them attractive investments for long-term investors. By keeping a close eye on these companies' developments and adhering to a disciplined investment strategy, investors can capitalize on their potential for sustained growth and value creation.

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