Jefferies has increased its price target on Ferguson Plc. to $300 from $289 and maintained a Buy rating on the shares. Ferguson shares are trading at $261.85, which represents a 49% gain over the past year and brings the stock close to its 52-week high of $271.64.
The company reiterated its long-term financial objectives, targeting market growth plus 2-4%, an outperformance contribution of 3-4%, and a 1-3% contribution from mergers and acquisitions. Taken together, those elements produce an approximate 6-11% growth range over the cycle. Ferguson also aims for annual operating margin expansion of 10-30 basis points and expects earnings per share growth in the low double-digit to mid-teens percentage range.
On a scale consistent with the company’s standing in the Trading Companies and Distributors category, Ferguson reported trailing-twelve-month revenue of $31.16 billion and a return on equity of 33%. The firm’s market capitalization stands at $51.3 billion, reflecting its position within its industry.
Management described several structural tailwinds that are supporting the business case, including a $90 billion opportunity tied to large capital projects, as well as demand drivers related to water infrastructure, climate considerations, and an aging and underbuilt housing stock. Management’s stated capital-allocation priorities place organic investment first, followed by M&A, dividend growth and share buybacks when leverage is below the company’s targeted 1-2x range.
Ferguson reported leverage of roughly 1.1x in 2025. While company fundamentals remain solid, some data indicate the possibility that the shares are rich at current levels, and further analysis would be required to assess valuation more fully. Management characterized 2025 as a lighter year for acquisitions and said it expects M&A activity to pick up in 2026, pointing to a healthy pipeline of potential deals.
The company’s acquisition priorities include expanding residential HVAC capabilities as it builds out dual-trade offerings, and enhancing nonresidential services such as fabrication, automation, process equipment and applied services that can be scaled on a national basis.
In shareholder-return developments, Ferguson has declared a quarterly dividend of $0.89 per share. Key corporate action dates include March 6, 2026, for the ex-dividend and record dates, and an anticipated payment date of April 30, 2026.
Other brokerages have adjusted their stances and targets in recent coverage. RBC Capital raised its price target to $271 from $247 and maintained an Outperform rating despite trimming its EBITDA estimates for 2026 and 2027 by 1%. Bernstein has reiterated an Outperform rating with a $288 price target, noting potential upside from data center construction that could lift sales by an estimated 6-8%. At the same time, RBC analysts have highlighted ongoing challenges in the U.S. housing market and retained a cautious view for 2026.
Key takeaways
- Jefferies raised its price target on Ferguson to $300 while keeping a Buy rating, reflecting a more favorable view of M&A prospects.
- Ferguson reaffirmed multi-year targets for combined organic growth, margin expansion and EPS growth, aiming for roughly 6-11% growth over the cycle and 10-30 basis points of operating margin improvement per year.
- Management expects a more active M&A cadence in 2026, focusing on residential HVAC and scalable nonresidential capabilities such as fabrication and automation.
Risks and uncertainties
- Valuation risk - some data suggest the stock may be overvalued at current prices, which could affect returns if fundamentals do not materially improve.
- Housing market headwinds - analysts have flagged challenges in the U.S. housing sector, which could pressure residential-related sales and margin performance.
- M&A timing and execution - the expectation of increased deal activity in 2026 depends on management’s ability to execute against a healthy pipeline and to integrate acquisitions effectively.
This coverage reflects ongoing analyst interest in Ferguson’s growth trajectory, capital allocation strategy and the potential for acquisitions to contribute to the company’s medium-term performance.