FERG Stock Forecast & Price Target

Ferguson Enterprises is poised for positive financial performance, with projected total sales for FY’26 estimated at $31.9 billion, reflecting a 4% year-over-year increase driven by a combination of price growth and stable volume. The company's focus on the non-residential market has yielded impressive results, evidenced by a 15% growth in non-residential end market revenues and an organic revenue increase of 5.8% year-over-year in F4Q25, outperforming estimates and consensus. Additionally, the gross margin improved to 31.7%, benefiting from operational efficiencies and favorable supplier pricing, which positions Ferguson favorably for sustained profitability within the North American market.

Ferguson Enterprises is facing a challenging financial outlook, highlighted by a 1% decline in HVAC revenues attributed to affordability issues that have shifted consumer preferences towards repair and servicing instead of replacement. Additionally, both residential end market revenues and the overall revenue guidance for the second half of the calendar year are expected to be flat or slightly lower due to weak housing starts and anticipated seasonality effects, underscoring a muted demand environment. The company also faces significant risks, including potential deflation in key product categories, increased competitive pressure, and the overarching threat of a prolonged housing downturn or recession, which could hinder its growth and profitability.