Gold prices hold sharp gains as soft US jobs data fuels Fed rate cut bets
On Tuesday, Morgan Stanley (NYSE:MS) analysts reaffirmed their Overweight rating on Ferguson Plc. (NYSE: FERG) stock, maintaining a price target of $195.00. The reaffirmation follows Ferguson’s report of better-than-expected growth and margins for the third quarter of 2025. According to InvestingPro data, Ferguson maintains a "GOOD" overall financial health score, with particularly strong profitability metrics. The company’s stock currently trades near $180, with analyst targets ranging from $168 to $258.
Ferguson reported a 5.0% organic revenue growth for the quarter, with the U.S. market contributing 5.0% and Canada adding 3.0%. This represents a sequential improvement from the 2.1% growth reported in the second quarter of 2025, surpassing the consensus estimate of 1%. The company’s growth was aided by acquisitions, which contributed 1.0%, though offset by a 1.7% drag from one fewer sales day and foreign exchange impacts, resulting in a total sales growth of 4.3%. InvestingPro analysis reveals two key strengths: the company operates with a moderate level of debt and maintains liquid assets exceeding short-term obligations. Subscribers can access 4 additional exclusive ProTips and comprehensive financial analysis.
The company’s gross margin improved by 50 basis points year-over-year to 31.0% in the third quarter, driven by specific value-capture actions and moderating deflation. Additionally, the adjusted operating profit margin rose by 20 basis points year-over-year to 9.4% on an adjusted basis, beating consensus by approximately 110 basis points. Ferguson’s adjusted operating profit reached $715 million, a 6% increase year-over-year and about 17% above consensus forecasts, attributed to pricing strategies and improved cost control. The company’s strong performance is reflected in its impressive return on equity of 30% and return on invested capital of 18% over the last twelve months.
During the quarter, Ferguson implemented efficiency actions, incurring nonrecurring charges of $68 million, which are expected to yield annualized savings of approximately $100 million. The company also reported leverage at 1.2x and completed $251 million in share buybacks for the quarter, bringing the year-to-date total to $759 million. Furthermore, Ferguson completed three acquisitions in the third quarter. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value. For detailed insights, including comprehensive valuation metrics and growth projections, investors can access the full Pro Research Report, available exclusively to subscribers.
In other recent news, Ferguson Plc reported better-than-expected third-quarter results, with adjusted earnings per share reaching $2.50, surpassing analyst estimates of $2.61. The company achieved a 4.3% year-over-year revenue increase to $7.6 billion, although this was slightly below the consensus forecast of $7.79 billion. Ferguson’s U.S. business experienced a 5% organic revenue growth, driven by strong non-residential construction activity, which saw a revenue rise of approximately 7%. Following these results, Ferguson raised its full-year guidance, now anticipating low to mid-single-digit revenue growth and an improved adjusted operating margin outlook of 8.5% to 9.0%.
Truist Securities reaffirmed its Buy rating for Ferguson, setting a price target of $200 after the earnings beat. The analysts noted Ferguson’s robust revenue growth across all end markets, highlighting significant market share gains in residential and commercial/industrial sectors. Despite Ferguson’s strong third-quarter performance, its guidance for the fiscal fourth quarter of 2025 is below Wall Street estimates. However, Truist Securities expects the company’s full-year EBIT to increase by a low to mid-single-digit percentage. Ferguson’s ability to outperform market expectations has been a focal point for analysts and investors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.