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Goldman Sachs initiated coverage on Ferguson Plc. (NYSE:FERG) with a buy rating and a $280.00 price target, citing improved pricing trends and execution at the company. With a market capitalization of $42 billion, Ferguson stands as a prominent player in the Trading Companies & Distributors industry. According to InvestingPro data, 14 analysts have recently revised their earnings expectations upward for the upcoming period.
The plumbing and heating products distributor reported 5% organic growth in its third-quarter fiscal 2025 results for the November-January period, with pricing turning flat after six consecutive quarters of deflation.
Ferguson’s improved pricing trends and execution contributed to third-quarter gross margin expansion of 50 basis points year-over-year, leading to a 22% beat on EBITA compared to Factset consensus expectations.
Goldman Sachs now forecasts Ferguson’s EBITA margin at the top end of the company’s new guidance range of 8.5%-9.0%, noting that commodity pricing and finished good pricing continue to be supportive for the company.
The investment bank also highlighted Ferguson’s potential to benefit from the inflationary impact of U.S. tariffs, while simultaneously raising its 12-month price target for Ferguson’s London-listed shares to 20,710 pence from 17,810 pence.
In other recent news, Ferguson Plc has seen several updates regarding its stock price targets and ratings from prominent financial firms. Morgan Stanley (NYSE:MS) has increased its price target for Ferguson to $220, maintaining an Overweight rating, citing expectations for stronger organic growth and improved margins in fiscal year 2025. Berenberg, however, downgraded Ferguson’s stock rating to Hold from Buy after a significant share price surge, while raising the price target to $215, indicating the stock now trades at fair value. UBS also raised its price target to $204, maintaining a Neutral rating, reflecting improved revenue and margin expectations.
RBC Capital increased its price target for Ferguson to $231, maintaining an Outperform rating, and highlighted the company’s strong third-quarter results and balanced end-market mix. They expressed optimism about future performance, noting Ferguson’s ability to maintain price discipline and rebound in gross margin percentages. Truist Securities raised its price target to $240, keeping a Buy rating, following positive third-quarter sales and EBIT margins. The firm noted strong growth in HVAC, Waterworks, and Commercial/Industrial sectors, though it cautioned that not all gains are expected to persist.
These recent developments reflect a mixed outlook from analysts, with some firms expressing confidence in Ferguson’s growth potential and others noting limited upside due to recent share price increases.
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