FERG Stock Forecast & Price Target

Ferguson Enterprises exhibits a positive financial outlook, as evidenced by projected total sales of $31.9 billion for FY'26, reflecting a 4% year-over-year increase bolstered by strong non-residential market growth. The firm reported a significant organic revenue increase of 5.8% year-over-year in F4Q25, driven primarily by robust performance in commercial and civil infrastructure sectors, with non-res growth at approximately 15%. Additionally, the company's gross margin improved to 31.7%, up 70 basis points year-over-year, highlighting effective operational execution and the ability to manage supplier price increases effectively.

Ferguson Enterprises's stock outlook appears negative due to a 1% decline in HVAC revenues driven by affordability issues, alongside stagnant revenues in residential markets attributed to weak housing starts and reduced spending in repair, maintenance, and improvement (RMI). Additionally, anticipated declines in EBIT margins during the second half of CY2025 demonstrate concerns regarding seasonal impacts and overall market conditions. The company also faces significant risks, including potential deflationary pressures on key product lines, increased competitive pressure amidst slowing demand, and vulnerability to a deeper housing downturn or recession.