FERG Stock Forecast & Price Target

Ferguson Enterprises has demonstrated strong performance in both residential and non-residential markets, with a reported growth rate of approximately 4% in non-residential sectors, signaling continued market share gains. The company's solid volume backdrop, particularly in Waterworks and various expansions, supports expectations for revenue growth to exceed earlier estimates, attributed to resilient end-market demand and reduced margin compression. Furthermore, Ferguson's recent inclusion in U.S. indexes is anticipated to enhance its visibility and broaden its investor base, providing additional support for its earnings growth trajectory over time.

Ferguson Enterprises has experienced a significant decline in its fiscal 2025 adjusted operating margin guidance, which has been lowered to 8.3%-8.8% from a prior range of 9.0%-9.5%. The company's first-quarter adjusted EBITDA of $502 million fell short of both RBC estimates and the broader market expectations, indicating weaker performance driven by lower gross margin percentages and headwinds from commodity deflation. Additionally, ongoing volume weakness and a less favorable mix in HVAC and Waterworks products are contributing to the negative outlook, further pressuring the firm's financial performance in the latter half of the fiscal year.