Ferguson PLC (FERG) AI Stock Analysis

• Market Cap: £43.15B
• Dividend Yield: 1.35%
• Average Volume (3M): 2.16M
• Price to Earnings (P/E): 28.0
• Beta (1Y): 1.07
• Revenue Growth: 4.92%
• EPS Growth: 18.72%
• Country: US
• Employees: 35,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 1.99
• Shares Outstanding: 194,502,700
• 10 Day Avg. Volume: 1,449,887
• 30 Day Avg. Volume: 2,162,744
• PEG Ratio: 2.62
• Price to Book (P/B): 7.62
• Price to Sales (P/S): 1.44
• P/FCF Ratio: 27.71
• 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: £272.54
• Price Target Upside: 22.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 11.12
• Revenue Forecast (FY): £32.60B

• Rating: 66 Neutral
• Price Target: $237.00 ▲(6.82% Upside)
• Action: Downgraded Date: 03/04/26
• Date: Action: Downgraded 03/04/26

FERG’s score is driven primarily by solid financial performance (strong revenue growth and steady profitability) tempered by weaker recent free-cash-flow growth and meaningful leverage. Technicals are neutral-to-slightly positive rather than strongly bullish, and valuation is somewhat rich (P/E ~25.8) with only a modest dividend yield, which together cap the overall score.

Positive Factors

Revenue Growth

Sustained +24% TTM revenue growth reflects strong demand and successful scale-up across branches and channels. Durable top-line expansion enhances purchasing leverage with suppliers, supports fixed-cost absorption across the distribution network, and funds reinvestment in logistics and digital capabilities over the medium term.

Healthy Distributor Margins

Margins are robust for a distributor, indicating pricing power and value-added services that command premiums. Persistently healthy gross and operating margins support resilient earnings through business cycles, enabling reinvestment in service capabilities and maintaining supplier relationships that undergird long-term competitive position.

Extensive Distribution Network

A broad branch footprint combined with counter service, logistics and e-commerce creates high service density and switching costs for trade customers. This multi-channel distribution and project-support model yields recurring, sticky revenue from contractors and commercial clients and supports durable cross-sell and fulfillment advantages.

Negative Factors

Weakening Free Cash Flow Growth

A ~27% drop in FCF growth signals working-capital or timing pressures that weaken the link between EBITDA and cash generation. Over months, inconsistent cash conversion constrains debt reduction, capital allocation optionality, and the ability to fund organic investment or returns to shareholders without increasing leverage.

Meaningful Leverage

Debt-to-equity near 0.92 indicates material leverage for a distributor. This reduces financial flexibility and raises sensitivity to interest-rate moves or earnings variability. In a downturn, leverage limits buffer for working-capital swings and constrains strategic moves like bolt-on M&A or large reinvestments.

Margin Momentum Moderation

The plateau and moderation of net margins since their peak suggests limits to operating-leverage gains and exposure to mix or competitive pressure. Without clear margin expansion, earnings upside depends more on volume growth, leaving profitability and cash flow vulnerable if top-line momentum slows.

Ferguson PLC Business Overview & Revenue Model

Company Description

Ferguson plc distributes plumbing and heating products in the United States and Canada. It offers plumbing and heating solutions to customers in the residential, commercial, civil/infrastructure, and industrial end markets. The company also distributes pipes, valves, fittings, plumbing supplies, water heaters, kitchen and bathroom fixtures, and appliances; heating, ventilation, air conditioning, and refrigeration products and supplies; and plumbing parts and supplies, fire sprinkler systems, hangers, struts, and fasteners. In addition, it distributes water meters and automation products, irrigation and drainage products, geosynthetics, and stormwater management products; flanges, general industrial maintenance repair and operations products, high density polyethylene products, and fabrication products; water and wastewater treatment products; and PVF solutions. Further, the company offers services, including consultation, advice and project management, pro pick-up, and delivery services; online tools; quotation, jobsite delivery and logistics, project management, and fabrication services; digitally enhanced estimation, and design services; advanced metering infrastructure services; and supply chain and equipment rental services. The company also sells its products through online channels. It operates a network of 1,679 branches and 11 distribution centers. Ferguson plc was founded in 1887 and is headquartered in Wokingham, the United Kingdom.

How the Company Makes Money

Ferguson makes money primarily by distributing building and infrastructure products to trade and commercial customers at a markup over its purchase cost, generating revenue when products are sold through its branch network and online platforms. Its key revenue streams are (1) product sales across major categories such as plumbing and heating, waterworks, and other building/industrial supplies; and (2) service-related revenue tied to fulfilling those sales, including delivery/logistics, project support, and other value-added services that help customers source, stage, and install materials. The company’s earnings are influenced by volume and mix (e.g., project-driven demand versus repair-and-remodel activity), pricing and gross margin management, availability and lead times in its supply chain, and operating leverage from running a large distribution footprint. Ferguson also benefits from relationships with a broad base of manufacturers and suppliers that provide access to branded products and inventory, and from its ability to consolidate demand from many customers to negotiate procurement terms and improve fulfillment efficiency.

Ferguson PLC Financial Statement Overview

Summary

Strong top-line momentum (TTM revenue $38.7B, +24.1%) with healthy distributor margins (gross ~30.7%, EBIT ~9.2%, net ~6.5%). Balance sheet leverage is manageable but meaningful (debt-to-equity ~0.92) and cash flow is the main constraint: free cash flow declined ~27.4% TTM despite positive generation (TTM FCF ~$1.21B), indicating less consistent cash conversion.

Income Statement

FERG shows solid profitability and improving scale. TTM (Trailing-Twelve-Months) revenue is $38.7B with strong growth (24.1%), and margins are steady-to-healthy for a distributor (gross margin ~30.7%, EBIT margin ~9.2%, net margin ~6.5%). However, profitability is not consistently expanding versus prior years (net margin peaked in 2022 and has since moderated), which limits the upside to the score despite strong top-line momentum.

Balance Sheet

Leverage looks manageable but not light: TTM (Trailing-Twelve-Months) debt is $5.4B versus equity of $5.9B (debt-to-equity ~0.92), an improvement from some prior periods that were closer to or above 1.0. Returns on equity are high (TTM ~35.6%), indicating efficient capital use, but also suggesting the business is operating with meaningful leverage and leaving less cushion if conditions weaken.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) operating cash flow of ~$1.51B and free cash flow of ~$1.21B, and free cash flow running at ~83% of net income (good earnings quality). The key weakness is recent softness: TTM free cash flow growth is down ~27.4% and operating cash flow is relatively low versus revenue (coverage indicated at ~0.39), pointing to working-capital or timing headwinds and less consistent cash conversion than profits suggest.

Breakdown	TTM	Jul 2025	Jul 2024	Jul 2023	Jul 2022	Jul 2021
Income Statement
Total Revenue	38.65B	30.76B	29.64B	29.73B	28.57B	22.79B
Gross Profit	11.81B	9.44B	9.05B	9.03B	8.76B	6.98B
EBITDA	3.83B	3.06B	2.98B	2.97B	3.12B	2.26B
Net Income	2.35B	1.86B	1.74B	1.89B	2.12B	1.47B
Balance Sheet
Total Assets	17.15B	17.73B	16.57B	15.99B	15.66B	13.71B
Cash, Cash Equivalents and Short-Term Investments	557.00M	674.00M	571.00M	669.00M	771.00M	1.33B
Total Debt	5.41B	5.97B	5.52B	5.26B	5.13B	3.60B
Total Liabilities	11.29B	11.90B	10.96B	10.96B	11.00B	8.71B
Stockholders Equity	5.86B	5.83B	5.62B	5.04B	4.67B	5.00B
Cash Flow
Free Cash Flow	1.21B	1.60B	1.50B	2.28B	859.00M	1.14B
Operating Cash Flow	1.51B	1.91B	1.87B	2.72B	1.15B	1.38B
Investing Cash Flow	-281.17M	-543.00M	-601.00M	-1.05B	-922.00M	-125.00M
Financing Cash Flow	-1.38B	-1.29B	-1.31B	-1.81B	-744.00M	-2.05B

Ferguson PLC Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 221.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FERG, the sentiment is Negative. The current price of 221.86 is below the 20-day moving average (MA) of 241.37, below the 50-day MA of 246.77, and below the 200-day MA of 232.49, indicating a bearish trend. The MACD of -8.23 indicates Positive momentum. The RSI at 32.92 is Neutral, neither overbought nor oversold. The STOCH value of 18.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FERG.

Ferguson PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GWW	77 Outperform	$49.54B	28.33	45.93%	0.86%	4.83%	-3.60%
WSO	77 Outperform	$15.35B	25.70	18.04%	3.38%	-0.71%	-0.17%
FAST	75 Outperform	$51.77B	36.60	32.83%	2.10%	6.92%	5.98%
CNM	71 Outperform	$9.32B	18.07	23.82%	―	8.09%	6.33%
FERG	66 Neutral	£43.15B	28.00	35.56%	1.35%	4.92%	18.72%
WCC	66 Neutral	$12.25B	18.89	13.02%	0.72%	5.28%	1.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%