Ferguson PLC (FERG – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Anthony Pettinari from Citi maintained a Hold rating on the stock and has a $168.00 price target.
Anthony Pettinari’s rating is based on several factors influencing Ferguson PLC’s current market performance. The company experienced a 5% decline in share value following a miss in second-quarter expectations and a reduction in the fiscal year 2025 operating margin guidance. This was primarily due to a 70 basis point year-over-year compression in gross margins, largely driven by price deflation and a shift towards HVAC products as part of the company’s growth strategy.
Additionally, EBITDA margins compressed by 120 basis points year-over-year as Ferguson PLC continued to invest in expanding its sales capacity. Despite the company maintaining its top-line guidance for low single-digit percentage growth, management commentary suggested a more subdued demand environment in both residential and commercial sectors, alongside prolonged year-over-year commodity deflation. Consequently, Pettinari adjusted the fiscal year 2025-2027 EBITDA estimates downward by 6% each year, reflecting a softer pricing and margin outlook. The target price was revised to $168, with an expected share price return of 7.0%, leading to the Hold rating.
Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FERG in relation to earlier this year.