FERG Stock Forecast & Price Target

Ferguson Enterprises is poised for strong performance, indicated by projected FY’26 total sales of $31.9 billion, reflecting a 4% year-over-year increase driven by a mix of pricing and modest volume growth. The company has demonstrated resilience in non-residential markets, with revenues growing approximately 15% in non-residential segments, complemented by a favorable gross margin of 31.7%, which improved by 70 basis points year-over-year. Additionally, Ferguson's fourth-quarter financials showcased a 6.9% revenue growth and a 13.4% increase in adjusted operating profit, both surpassing consensus estimates, highlighting the effectiveness of its operational strategies and strong market demand.

Ferguson Enterprises faces a challenging landscape characterized by declining HVAC revenues, which fell by 1% due to ongoing affordability issues that have shifted customer preferences towards repair and servicing rather than equipment replacement. Additionally, the residential end market remains stagnant, with flat year-over-year revenues reflecting weak housing starts and reduced repair, maintenance, and improvement spending. The company is also exposed to several risks, including potential deflation in key product categories, heightened competitive pressure amid declining demand, and the adverse impacts of a prolonged housing downturn or recession, all of which contribute to a pessimistic outlook for its financial performance.