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Investing.com - UBS raised its price target on Ferguson Plc. (NYSE:FERG), a $45.7 billion market cap trading companies leader with $30.8 billion in annual revenue, to $225.00 from $204.00 on Wednesday, while maintaining a Neutral rating on the stock following the company’s fiscal fourth-quarter 2025 results. According to InvestingPro analysis, the stock appears overvalued at current levels.
The investment bank adjusted its fiscal year 2026-2028 adjusted earnings per share estimates downward, citing more conservative margin expectations for the second half of calendar year 2025. The revised forecasts now stand at $10.95, $12.50, and $14.25 for FY26, FY27, and FY28 respectively. The company currently trades at a P/E ratio of 24.85x, with InvestingPro data showing a high PEG ratio of 2.66x, suggesting premium pricing relative to growth.
Despite the earnings adjustment, UBS increased its valuation multiple to approximately 18x FY27 estimated earnings, up from about 16x previously. The firm justified this higher multiple based on approaching a trough in end market activity and increased confidence in a potential industry recovery in 2026.
UBS expects Ferguson to continue delivering above-market growth over time as the company leverages its size and scale while implementing its HVAC/plumbing dual-trade initiative.
The investment bank maintained its Neutral rating on Ferguson shares, stating that the risk-reward remains fairly balanced at current levels.
In other recent news, Ferguson PLC reported its fourth-quarter earnings for 2025, with earnings per share (EPS) surpassing analyst expectations. The company posted an EPS of $3.48, exceeding the forecasted $3.29, representing a 5.78% surprise. However, Ferguson’s revenue fell short of expectations, coming in at $8.5 billion compared to the anticipated $8.67 billion. Despite this revenue miss, the company’s performance was viewed positively by the market. Additionally, Truist Securities raised its price target for Ferguson to $260 from $240, maintaining a Buy rating on the stock. The research firm highlighted Ferguson’s strong growth in the non-residential segment and market share gains across most business areas as key factors in their decision. These developments reflect recent positive momentum for Ferguson.
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