Yahoo Finance Ferguson plc (NYSE:FERG) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
Shareholders might have noticed that Ferguson plc (NYSE:FERG) filed its quarterly result this time last week. The early response was not positive, with shares down 3.4% to US$199 in the past week. It was a credible result overall, with revenues of US$7.3b and statutory earnings per share of US$2.18 both in line with analyst estimates, showing that Ferguson is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Ferguson
Taking into account the latest results, the consensus forecast from Ferguson's 21 analysts is for revenues of US$31.3b in 2025. This reflects a reasonable 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.8% to US$10.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$31.5b and earnings per share (EPS) of US$10.21 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$216, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ferguson, with the most bullish analyst valuing it at US$263 and the most bearish at US$107 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Ferguson's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.9% growth on an annualised basis. This is compared to a historical growth rate of 9.7% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% annually. Factoring in the forecast slowdown in growth, it looks like Ferguson is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Ferguson analysts - going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Ferguson that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
