Ferguson stock remains a Buy at Truist despite HVAC pressure

Investing.com - Truist Securities has reiterated its Buy rating and $240.00 price target on Ferguson Plc. (NYSE:FERG), despite potential pressure in the company’s upcoming earnings report. The stock has taken a significant hit, dropping nearly 11% over the past week, according to InvestingPro data.

The firm notes that an earnings warning from CNM and weak commentary from HVAC producer CARR have raised questions about Ferguson’s performance, particularly in its residential HVAC segment which represents approximately 12% of the company’s sales. As a prominent player in the Trading Companies & Distributors industry with $30.2 billion in revenue, Ferguson maintains strong financial health with current assets exceeding short-term obligations.

Truist believes Ferguson’s position as a distributor will cushion some of the weakness in residential HVAC, while slowing residential waterworks business (part of 22% of total sales) should be partially offset by cross-selling opportunities.

The firm acknowledges that Ferguson’s first half of fiscal year 2026 (ending July 2026) will likely be impacted by these headwinds, leading Truist to maintain estimates below consensus expectations.

Despite near-term challenges, Truist remains confident in Ferguson’s long-term growth story, suggesting the company could achieve high-single-digit organic growth once both residential and commercial cycles turn positive.

In other recent news, Ferguson Enterprises Inc. announced a quarterly dividend of $0.83 per share, set to be paid on November 7, 2025, to shareholders of record as of September 26, 2025. The company also disclosed the currency exchange rate for depositary interest holders who will receive the dividend in British pounds, setting the rate at 1.3404 GBP/USD. In addition to these financial updates, Ferguson reported a 5% organic growth in its third-quarter fiscal 2025 results, covering the November-January period. This growth comes as pricing trends have stabilized, marking a shift from six consecutive quarters of deflation. Furthermore, Goldman Sachs initiated coverage on Ferguson with a buy rating, highlighting the company’s improved pricing trends and execution. The firm set a price target of $280.00, reflecting optimism in Ferguson’s market performance. These developments provide investors with key insights into Ferguson’s financial health and market outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.