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Ferguson PLC (FERG)
NYSE:FERG
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Ferguson PLC
(NYSE:FERG)
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Rating:69Neutral
Price Target:
$255.00
▲(3.62% Upside)
Ferguson PLC's overall stock score is driven by strong financial performance and positive earnings call highlights, particularly in nonresidential markets and strategic growth areas. Technical analysis supports a positive trend, though valuation concerns due to a high P/E ratio and modest dividend yield temper the outlook. Challenges in the residential market and operational efficiency also weigh on the score.
Positive Factors
Negative Factors
Ferguson PLC (FERG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
£48.03B
Dividend Yield1.35%
Average Volume (3M)2.16M
Price to Earnings (P/E)26.3
Beta (1Y)1.01
Revenue Growth3.80%
EPS Growth9.26%
CountryUS
Employees35,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)3.48
Shares Outstanding196,151,440
10 Day Avg. Volume1,449,887
30 Day Avg. Volume2,162,744
Financial Highlights & Ratios
PEG Ratio2.62
Price to Book (P/B)7.62
Price to Sales (P/S)1.44
P/FCF Ratio27.71
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£260.87Price Target Upside6.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Ferguson PLC Business Overview & Revenue Model
Company DescriptionFerguson PLC is a leading distributor of plumbing and heating products, primarily serving the North American market. The company operates through a network of distribution centers and branches that supply a wide range of products including plumbing supplies, HVAC equipment, and building materials. Ferguson caters to various sectors such as residential, commercial, and industrial markets, providing solutions that range from basic plumbing products to complex industrial systems.
How the Company Makes MoneyFerguson PLC generates revenue primarily through the sale of plumbing and heating products to professional contractors, builders, and consumers. The company's revenue streams include direct sales through its branches, online sales via its e-commerce platform, and value-added services such as inventory management and logistics support. Ferguson benefits from economies of scale due to its extensive distribution network and strategic partnerships with manufacturers, which allow it to offer a broad product range and competitive pricing. The company's earnings are also supported by its focus on customer service and its ability to provide customized solutions tailored to the needs of various market segments.
Ferguson PLC Earnings Call Summary
Earnings Call Date:Sep 16, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Dec 09, 2025
Earnings Call Sentiment Positive
Ferguson delivered strong performance in the fourth quarter, particularly in the nonresidential market and key growth areas like HVAC and Waterworks. However, the residential market remains a challenge with flat revenue and declines in specific segments. The company's strategic initiatives and capital returns to shareholders were positive aspects, but the residential market's weakness and HVAC revenue decline present ongoing challenges.Q4-2025 Updates
Positive Updates
Strong Fourth Quarter Performance
Sales of $8.5 billion increased 6.9% over prior year, driven by organic growth of 5.8% and acquisition growth of 1.1%. Gross margin of 31.7% increased 70 basis points over the prior year.
Nonresidential Market Resilience
Net sales increased 7.1%, with nonresidential revenue growth of approximately 15%. Commercial mechanical revenue grew 21%, and Waterworks revenues increased 15%.
Capital Returns to Shareholders
Returned $354 million to shareholders through share repurchases and dividends. Executed $948 million in share repurchases for the year.
Successful Execution of Key Growth Areas
HVAC revenue increased 8% for the year, Waterworks revenue grew 10%, and Ferguson Home delivered 3% growth in the fourth quarter.
Negative Updates
Residential Market Weakness
Residential end market revenue was flat in the quarter. Residential trade plumbing revenues decreased 2% due to headwinds in new construction and ongoing PVC price deflation.
HVAC Revenue Decline
HVAC revenue was slightly down due to softer market conditions impacted by the industry's transition to new efficiency standards and weak new residential construction activity.
Company Guidance
During Ferguson's fourth quarter and fiscal year 2025 call, the company outlined strong financial performance despite challenging market conditions. Key metrics included a 6.9% increase in sales to $8.5 billion, driven by 5.8% organic growth and 1.1% acquisition growth. The gross margin improved by 70 basis points to 31.7%, and operating profit rose by 13.4% to $972 million. Diluted earnings per share increased 16.8% to $3.48, and the company returned $354 million to shareholders through repurchases and dividends. Ferguson's U.S. sales grew by 7.1%, with non-residential markets showing resilience with 15% revenue growth, while residential revenue remained flat. The company invested $483 million in growth areas like HVAC expansion and Waterworks diversification and maintained a strong balance sheet with net debt-to-EBITDA at 1.1x. For the 2025 calendar year, Ferguson expects mid-single-digit revenue growth and an operating margin between 9.2% and 9.6%.Ferguson PLC Financial Statement Overview
Summary
Ferguson PLC shows a solid financial position with consistent revenue growth and strong gross profit margins. The balance sheet reflects improved leverage with a lower debt-to-equity ratio, while the cash flow statement indicates positive free cash flow growth. However, there are areas for improvement in operational efficiency and liquidity management.Income Statement
Ferguson PLC demonstrates stable revenue growth with a slight increase of 1.82% in the latest year. The gross profit margin remains strong at approximately 30.67%, indicating efficient cost management. However, the net profit margin has slightly decreased to 6.03%, suggesting some pressure on net income. The EBIT and EBITDA margins are relatively low, indicating potential challenges in operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.88, reflecting a better balance between debt and equity financing. Return on equity is robust at 31.82%, showcasing strong profitability relative to shareholder investments. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing stability.70
Positive
Cash Flow
Ferguson PLC's free cash flow growth is positive at 14.37%, indicating improved cash generation. The operating cash flow to net income ratio is moderate at 0.32, suggesting a decent conversion of net income into cash. The free cash flow to net income ratio is strong at 0.84, highlighting effective cash management. However, the operating cash flow coverage ratio has decreased compared to previous years, indicating potential liquidity concerns.68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.76B | 30.76B | 29.64B | 29.73B | 28.57B | 22.79B |
| Gross Profit | 9.44B | 9.44B | 9.05B | 9.03B | 8.76B | 6.98B |
| EBITDA | 3.06B | 3.06B | 2.98B | 2.97B | 3.12B | 2.26B |
| Net Income | 1.86B | 1.86B | 1.74B | 1.89B | 2.12B | 1.47B |
Balance Sheet | ||||||
| Total Assets | 17.73B | 17.73B | 16.57B | 15.99B | 15.66B | 13.71B |
| Cash, Cash Equivalents and Short-Term Investments | 674.00M | 674.00M | 571.00M | 669.00M | 771.00M | 1.33B |
| Total Debt | 5.97B | 5.97B | 5.52B | 5.26B | 5.13B | 3.60B |
| Total Liabilities | 11.90B | 11.90B | 10.96B | 10.96B | 11.00B | 8.71B |
| Stockholders Equity | 5.83B | 5.83B | 5.62B | 5.04B | 4.67B | 5.00B |
Cash Flow | ||||||
| Free Cash Flow | 1.62B | 1.60B | 1.50B | 2.28B | 859.00M | 1.14B |
| Operating Cash Flow | 1.92B | 1.91B | 1.87B | 2.72B | 1.15B | 1.38B |
| Investing Cash Flow | -547.73M | -543.00M | -601.00M | -1.05B | -922.00M | -125.00M |
| Financing Cash Flow | -1.29B | -1.29B | -1.31B | -1.81B | -744.00M | -2.05B |
Ferguson PLC Technical Analysis
Positive
246.10
Price Trends
234.60
Positive
228.75
Positive
201.47
Positive
Market Momentum
4.06
Positive
55.74
Neutral
49.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FERG, the sentiment is Positive. The current price of 246.1 is above the 20-day moving average (MA) of 243.55, above the 50-day MA of 234.60, and above the 200-day MA of 201.47, indicating a bullish trend. The MACD of 4.06 indicates Positive momentum. The RSI at 55.74 is Neutral, neither overbought nor oversold. The STOCH value of 49.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FERG.
Ferguson PLC Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $12.48B | 20.13 | 13.06% | 0.69% | 5.28% | 1.97% | |
73 Outperform | $45.76B | 26.86 | 48.98% | 0.90% | 4.83% | -3.60% | |
73 Outperform | $14.53B | 27.96 | 17.61% | 3.33% | -0.71% | ― | |
69 Neutral | £48.03B | 26.28 | 32.29% | 1.35% | 3.80% | 9.26% | |
69 Neutral | $10.10B | 22.75 | 24.42% | ― | 11.02% | 7.08% | |
67 Neutral | $47.85B | 39.08 | 32.74% | 2.15% | 6.92% | 5.98% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
FERG
Ferguson PLC
246.10
42.22
20.71%
FAST
Fastenal Company
40.77
-0.03
-0.07%
GWW
WW Grainger
952.66
-241.85
-20.25%
WSO
Watsco
351.13
-163.76
-31.80%
WCC
Wesco International
257.38
53.57
26.28%
CNM
Core & Main
51.10
7.52
17.26%
Ferguson PLC Corporate Events
Private Placements and Financing
Ferguson PLC Secures New $1.5 Billion Credit Facility
Positive
Apr 3, 2025
On April 2, 2025, Ferguson Enterprises Inc. entered into a new revolving credit agreement with Ferguson UK Holdings Limited and other parties, establishing a $1.5 billion unsecured credit facility maturing in 2030. This agreement allows for potential increases up to an additional $500 million depending on lender commitments and includes various interest rate options and covenants. Concurrently, Ferguson terminated its previous $1.35 billion multicurrency revolving facility, with no outstanding borrowings at the time of termination.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.