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, driven by both pricing and volume gains in the U.S. Significant growth is observed in the non-residential market, with a notable 15% increase in end market revenues, particularly in commercial and civil infrastructure, which are key drivers of Ferguson's expansion. Additionally, the firm reported a gross margin of 31.7%, up 70 basis points year-over-year, supported by operational improvements and favorable supplier pricing, highlighting its sound financial execution.

Ferguson Enterprises faces a challenging outlook primarily due to a 1% decline in HVAC revenues attributed to affordability issues that shift consumer preference toward repair and servicing instead of replacement, compounded by difficult year-over-year comparisons. The residential end market remains weak, with revenues stagnating, reflecting muted housing starts and reduced spending on repair, maintenance, and improvement. Additionally, significant risks such as potential deflation in PVC and Ductile pipe products, increasing competitive pressure, an ongoing housing downturn, and challenges in executing growth strategies may negatively impact Ferguson's financial performance.