FERG: Ongoing Share Gains And Market Stability Will Support Future Performance

Ferguson Enterprises' analyst price target has been raised modestly. Analysts cite strong organic growth in non-residential markets and ongoing share gains, which are offsetting headwinds in residential and HVAC sectors.

Analyst Commentary

Recent updates from Street research firms highlight both optimism and caution regarding Ferguson Enterprises’ future performance and valuation, following its latest quarterly results and revised guidance.

• Bullish analysts note robust organic growth, driven by significant outperformance in non-residential markets and positive inflation trends. This supports higher valuation multiples.
• Several firms cite Ferguson's continued ability to capture large projects, which has led to meaningful market share gains even amid broader sector headwinds.
• Quarterly revenue and adjusted operating profit growth exceeded consensus expectations, reflecting effective execution and resilience in challenging environments.
• The company is seen as having a defending, moat-like business model that sustains capacity for ongoing share gains. This structure is viewed as enhancing prospects for future growth cycles and recovery, particularly as markets begin to stabilize.

• Bearish analysts remain cautious about near-term volatility in the residential and HVAC sectors, which could limit upside until market conditions improve.
• Some forecasts are tempered by more conservative margin expectations in the coming periods. This reflects continued uncertainty in the timing of an industry-wide recovery.
• Headwinds in new residential construction and repair, maintenance, and improvement activity are likely to persist in the near term, which could potentially cap further multiple expansion.

What's in the News

• From May 1, 2025 to July 31, 2025, Ferguson repurchased over 908,000 shares ($183.54 million), completing a buyback of nearly 12.74% of shares for more than $4 billion under its 2021 buyback plan (Key Developments).
• The company is changing its fiscal year-end from July 31 to December 31. Ferguson will begin reporting on a calendar year basis starting January 1, 2026. This change includes a five-month transition period and updated historical financial information (Key Developments).
• On September 11, 2025, Ferguson’s Board amended the bylaws to reflect the new fiscal year-end of December 31, supporting the organizational transition (Key Developments).
• Ferguson issued new earnings guidance, projecting mid-single digit net sales growth for the calendar year 2025 (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen slightly to $258.41 from $257.00.
• The Discount Rate has edged lower from 8.14% to 8.12%.
• The Revenue Growth Projection has increased and is now at 6.06% compared to the prior 4.76%.
• The Net Profit Margin is now projected at 6.53%, representing a minor decrease from 6.78%.
• The Future P/E Ratio has seen a slight increase to 25.22x from 25.09x.