Ferguson PLC (FERG) AI Stock Analysis

• Market Cap: $32.73B
• Dividend Yield: 2.08%
• Average Volume (3M): 2.65M
• Price to Earnings (P/E): 20.3
• Beta (1Y): 1.04
• Revenue Growth: 1.84%
• EPS Growth: -5.54%
• Country: US
• Employees: 35,000
• Sector: Industrials
• Sector Strength: 70
• Industry: Industrial - Distribution
• EPS (TTM): 8.13
• Shares Outstanding: 198,700,180
• 10 Day Avg. Volume: 2,589,104
• 30 Day Avg. Volume: 2,653,863
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.05
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $191.65
• Price Target Upside: 16.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Ferguson PLC maintains a strong financial position with robust profitability and efficient equity utilization. The stock faces challenges from moderate revenue growth and reliance on debt, while technical indicators suggest bearish momentum. The valuation is fair, and despite mixed earnings results, strategic initiatives and a new credit facility support a positive outlook.

Positive Factors

Growth Initiatives

Investments in people, product and expansion are well underway, and FERG has completed >500 counter conversions, and ahead of schedule to complete >650 dual trade counters in fiscal 2026.

Market Position

FERG is the largest distributor in our coverage, generating ~$30bn in sales across a variety of North American residential and non-residential construction markets.

Negative Factors

Deflation Impact

Gross margins decline of 70bps is due to still operating in a down market, persistent deflation, and some mix pressure from stronger growth in HVAC/Waterworks.

Demand Environment

Management commentary pointed to a more muted demand environment in both residential and commercial sectors.

Margins Pressure

Margins are expected to decline to ~8.5% in FY25, vs. the prior high of 10.3% in FY22, as commodity products deflation and weak demand continue to hinder operating leverage.

Ferguson PLC Business Overview & Revenue Model

Company Description

Ferguson PLC (FERG) is a leading distributor of plumbing and heating products, primarily serving the North American market. The company specializes in providing infrastructure, commercial, and residential solutions through a wide range of products including faucets, pipes, valves, fittings, and water heaters. Ferguson operates through a network of branches and e-commerce platforms, catering to professional contractors, trade professionals, and consumers.

How the Company Makes Money

Ferguson PLC generates revenue primarily through the sale and distribution of plumbing and heating products. The company operates a multi-channel distribution model that includes a vast network of local branches, online platforms, and direct sales teams, enabling it to reach a wide customer base. Revenue streams are bolstered by strategic partnerships with manufacturers and suppliers, allowing Ferguson to offer an extensive catalog of branded and private-label products. Additionally, the company benefits from providing value-added services such as installation and maintenance support, further enhancing its earnings potential.

Ferguson PLC Financial Statement Overview

Summary

Ferguson PLC exhibits strong financial health with robust profitability margins and efficient equity utilization. The balance sheet shows prudent leverage, although the reliance on debt may pose risks in unfavorable market conditions. Cash flows are strong, providing a solid base despite some recent fluctuations. Overall, the company is financially stable but should focus on improving revenue growth and managing debt levels.

Income Statement

Ferguson PLC demonstrates robust profitability metrics with a strong Gross Profit Margin of 30.07% and a solid EBIT Margin of 8.44% for TTM. While the Net Profit Margin is healthy at 5.49%, the company has experienced moderate revenue growth, with a TTM revenue growth rate of 0.89%. These figures indicate stable profitability and efficient cost management, though the growth rate suggests a period of stabilizing or slowing top-line growth.

Balance Sheet

The balance sheet of Ferguson PLC reflects a moderate debt-to-equity ratio of 1.10, indicating balanced leverage. The Return on Equity is strong at 29.87%, suggesting efficient use of equity to generate profits. However, the equity ratio of 33.19% indicates that a significant portion of the company's assets is financed through debt, which may present some financial risk in the case of market downturns.

Cash Flow

Ferguson PLC shows strong cash flow performance, with a reasonable Operating Cash Flow to Net Income ratio of 1.03 and a solid Free Cash Flow to Net Income ratio of 0.83. The company also reported a positive Free Cash Flow Growth Rate of -9.63% for TTM, suggesting some volatility in cash flow generation, but overall, the company maintains healthy cash flow management.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
29.90B	29.64B	29.73B	28.57B	22.79B	21.82B
	Gross Profit
8.99B	9.05B	9.03B	8.76B	6.98B	6.42B
	EBIT
2.52B	2.65B	2.66B	2.82B	2.03B	1.42B
	EBITDA
2.87B	2.98B	3.10B	3.12B	2.25B	1.98B
	Net Income Common Stockholders
1.64B	1.74B	1.89B	2.12B	1.47B	961.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
764.00M	571.00M	601.00M	771.00M	1.33B	2.12B
	Total Assets
16.53B	16.57B	15.99B	15.66B	13.48B	13.46B
	Total Debt
6.02B	5.52B	4.84B	5.45B	3.80B	4.52B
	Net Debt
5.26B	4.95B	4.24B	4.68B	2.47B	2.41B
	Total Liabilities
11.04B	10.96B	10.96B	11.00B	8.68B	9.09B
	Stockholders Equity
5.49B	5.62B	5.04B	4.67B	4.81B	4.37B
Cash Flow		Free Cash Flow
1.36B	1.50B	2.28B	859.00M	1.29B	1.57B
	Operating Cash Flow
1.69B	1.87B	2.72B	1.15B	1.54B	1.87B
	Investing Cash Flow
-561.78M	-601.00M	-1.05B	-922.00M	-172.00M	-606.00M
	Financing Cash Flow
-1.00B	-1.31B	-1.81B	-744.00M	-2.08B	-485.00M

Ferguson PLC Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 164.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FERG, the sentiment is Neutral. The current price of 164.73 is above the 20-day moving average (MA) of 161.07, below the 50-day MA of 168.66, and below the 200-day MA of 188.69, indicating a neutral trend. The MACD of -2.91 indicates Negative momentum. The RSI at 40.09 is Neutral, neither overbought nor oversold. The STOCH value of 32.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FERG.

Ferguson PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSO	78 Outperform	$20.17B	37.53	20.39%	2.12%	4.59%	-2.05%
CNM	78 Outperform	$9.53B	22.92	26.10%	―	11.03%	-0.85%
FAST	77 Outperform	$46.24B	40.22	32.35%	1.98%	3.08%	-0.76%
AIT	74 Outperform	$8.47B	22.34	22.70%	0.69%	0.37%	3.52%
FERG	74 Outperform	$32.73B	20.27	29.63%	2.08%	1.84%	-5.54%
GWW	71 Outperform	$46.28B	24.66	58.98%	0.82%	4.19%	6.60%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%

Ferguson PLC Corporate Events

Ferguson PLC Secures New $1.5 Billion Credit Facility

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.