FERG Stock Forecast & Price Target

Ferguson Enterprises is projected to achieve total sales of $31.9 billion in FY’26, reflecting a 4% year-over-year increase, supported by both price growth and solid performance in the non-residential market, which saw a significant 15% growth. The company's gross margin improved to 31.7%, exceeding expectations due to effective operational execution and favorable supplier pricing dynamics. Strong performance in non-residential segments, particularly commercial and infrastructure, combined with positive trends in bidding and shipments for large capital projects, indicates a robust outlook for Ferguson in the North American market.

Ferguson Enterprises has experienced a 1% decline in HVAC revenues, attributed to ongoing affordability issues prompting customers to opt for repairs over replacements, coupled with challenging year-over-year comparisons. The residential end markets remain weak, evidenced by flat revenues amidst muted housing starts and repair and maintenance spending, suggesting continued pressure on sales. Additionally, the company faces significant risks including potential deflation in key product prices, competitive pressures from slowing demand, and a challenging macroeconomic environment, particularly concerning a prolonged housing downturn or recession.