FERG Stock Forecast & Price Target

Ferguson Enterprises is showing positive momentum through continued share gains in both residential and non-residential markets, with non-res growth reported at approximately 4%. The firm is benefiting from a strong volume backdrop across its Waterworks division and various expansions, which are driving growth despite challenges from price headwinds. Additionally, Ferguson's recent inclusion in U.S. indexes is expected to broaden its investor base and support its ongoing earnings growth trajectory, contributing to a favorable outlook for the company.

Ferguson Enterprises is facing a negative outlook primarily due to a significant decline in their adjusted operating margin guidance for FY'25, which has been revised down to 8.3%-8.8% from a previous range of 9.0%-9.5%. The firm's first-quarter adjusted EBITDA also fell short of expectations, coming in at $502 million compared to anticipated figures, reflecting prevalent weakness in gross margins attributed to declining end markets and commodity deflation. This ongoing margin erosion, coupled with unexpected drivers impacting performance, has led to increased pressure on the stock as investor sentiment adjusts to the latest guidance and results.