Analyst upgrade
Bernstein SocGen Group has increased its price target for Ferguson Plc to $310 from $288 while affirming an Outperform rating. The firm pointed to an expanding total addressable market (TAM) for large capital projects - a trend Bernstein attributes primarily to accelerating data center construction.
Management and analyst TAMs
Company management boosted its Large Capital Project TAM to $90 billion, a near doubling from its prior $50 billion estimate published in June 2024. Bernstein said that revision sits within the firm’s own TAM range of $80 billion to $100 billion that it published in November. The analyst team also flagged that technology companies’ commitments to new and expanded data center capacity are beginning to materialize, which supports the larger TAM assumptions.
Competitive positioning
Bernstein argued that Ferguson is well positioned among industrial distributors to capture incremental sales tied to the data center build-out. The firm contrasted Ferguson’s exposure with peers: Fastenal and Grainger are said to have more limited links to data center construction, while Watsco’s focus is more squarely on HVAC products that data centers frequently source directly from manufacturers rather than through distributors.
Financials and valuation
Ferguson’s shares have risen 52.7% over the past year to $261.85, trading near the company’s 52-week high and implying a market capitalization of roughly $51.2 billion. Over the last twelve months the company generated $31.3 billion in revenue, a year-over-year increase of 5%.
InvestingPro analysis cited in the same note indicates Ferguson currently appears overvalued relative to its Fair Value and mentions a trailing price-to-earnings ratio of 25.73. The research also highlights Ferguson’s standing within the Trading Companies & Distributors industry as a persistent feature of its profile.
Outlooks and timelines
Bernstein said Ferguson’s product mix, geographic footprint and scale should enable the company to participate in the data investment cycle through fiscal year 2027. The analyst firm views this multi-year timeline as a key part of the thesis for material sales growth tied to large capital projects.
Other analyst and corporate updates
In other broker moves, Jefferies has raised its price target for Ferguson to $300 while maintaining a Buy rating, citing the company’s long-term growth targets and potential benefits from mergers and acquisitions. RBC Capital adjusted its price target to $271 and kept an Outperform rating, though it modestly lowered its EBITDA estimates for 2026 and 2027. Separately, there is a note that Bernstein previously reiterated an Outperform rating with a $288 price target while highlighting data center-driven growth potential.
Ferguson has also declared a quarterly dividend of $0.89 per share, with the key dates for that dividend payment set for early 2026. RBC’s commentary additionally referenced challenges in the U.S. housing sector while still preferring Ferguson for its positioning in the market.
Bottom line
Analysts point to an enlarged addressable market for large capital projects, driven by data center investment, as the primary reason for higher price targets and sustained Outperform ratings. Ferguson’s recent revenue growth, scale and product footprint are central to the bullish case, even as some valuation metrics suggest the shares may be priced at a premium.