Ferguson Enterprises Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

There's been a notable change in appetite for Ferguson Enterprises Inc. (NYSE:FERG) shares in the week since its quarterly report, with the stock down 14% to US$187. It looks like the results were a bit of a negative overall. While revenues of US$7.8b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.9% to hit US$2.34 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Ferguson Enterprises

Following the latest results, Ferguson Enterprises' 21 analysts are now forecasting revenues of US$30.3b in 2025. This would be a credible 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 7.6% to US$9.07. Before this earnings report, the analysts had been forecasting revenues of US$30.4b and earnings per share (EPS) of US$9.37 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$223, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Ferguson Enterprises at US$258 per share, while the most bearish prices it at US$168. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Ferguson Enterprises' revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2025 being well below the historical 9.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ferguson Enterprises is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ferguson Enterprises' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$223, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Ferguson Enterprises going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Ferguson Enterprises that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.