FERG Stock Forecast & Price Target

Ferguson Enterprises is positioned for strong revenue growth, as evidenced by a resilient non-residential market that has seen approximately 4% growth and ongoing share gains across both residential and non-residential sectors. Continued demand in the Waterworks segment, coupled with the company’s strategic expansions in treatment facilities and erosion control, support a solid volume backdrop that enhances earnings growth potential. Additionally, Ferguson's recent inclusion in U.S. indexes is expected to broaden its investor base and provide further support for its financial performance trajectory.

Ferguson Enterprises has experienced a decline in its financial outlook, as evidenced by its revision of FY'25 adjusted operating margin guidance to 8.3%-8.8%, down from a previous estimate of 9.0%-9.5%. The company's first-quarter adjusted EBITDA of $502 million fell short of market expectations, reflecting pressure from weaker end markets and ongoing commodity deflation, which adversely affected gross margin percentages. The overall sales guidance remains unchanged despite significant concerns regarding volume weakness and a notable erosion in operating margins, leading to a negative sentiment surrounding the stock.