Ferguson logged a 0.1% change during today's morning session, and is now trading at a price of $219.24 per share.
Ferguson returned gains of 14.8% last year, with its stock price reaching a high of $225.63 and a low of $146.0. Over the same period, the stock outperformed the S&P 500 index by 3.5%. More recently, the company's 50-day average price was $185.46. Ferguson Enterprises Inc. distributes plumbing and heating products in the United States and Canada. Based in Newport News, VA, the Large-Cap Industrials company has 35,000 full time employees. Ferguson has offered a 1.5% dividend yield over the last 12 months.
Stagnant Revenue Growth With No Capital Eexpenditures:
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Revenue (M) | $19,940 | $22,792 | $28,566 | $29,734 | $21,927 |
| Net Margins | 5% | 6% | 7% | 6% | 6% |
| Net Income (M) | $961 | $1,472 | $2,122 | $1,889 | $1,216 |
| Net Interest Expense (M) | -$93 | -$98 | -$1 | -$11 | $118 |
| Diluted Shares (M) | 227 | 225 | 219 | 205 | 201 |
| Earnings Per Share | $4.24 | $6.55 | $9.69 | $9.12 | $5.99 |
| EPS Growth | n/a | 54.48% | 47.94% | -5.88% | -34.32% |
| Total Debt (M) | n/a | $2,512 | $3,929 | $3,766 | $4,500 |
an Increase in Expected Earnings Improves Value but Trades Above Its Graham Number:
Ferguson has a trailing twelve month P/E ratio of 23.1, compared to an average of 24.03 for the Industrials sector. Based on its EPS guidance of $11.04, the company has a forward P/E ratio of 16.8. According to the 17.3% compound average growth rate of Ferguson's historical and projected earnings per share, the company's PEG ratio is 1.34. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 12.7%. On this basis, the company's PEG ratio is 1.83. This suggests that these shares are overvalued. Furthermore, Ferguson is likely overvalued compared to the book value of its equity, since its P/B ratio of 7.83 is higher than the sector average of 2.89. The company's shares are currently trading 256.3% below their Graham number. Ultimately, Ferguson's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Ferguson Has an Average Rating of Buy:
The 21 analysts following Ferguson have set target prices ranging from $168.12 to $280.0 per share, for an average of $229.2 with a buy rating. The company is trading -4.3% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Ferguson has a very low short interest because 1.8% of the company's shares are sold short. Institutions own 95.9% of the company's shares, and the insider ownership rate stands at 2.48%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $4,202,555,320.
