Ferguson PLC (FERG, Financial) has recently demonstrated a robust performance in the stock market, with its market capitalization reaching $35.65 billion. The current stock price stands at $175.21, reflecting a notable 3.45% gain over the past week and an impressive 10.45% gain over the past three months. These figures indicate a strong upward trend for the company's shares, which has caught the attention of investors and market analysts alike.
The GF Value of Ferguson PLC is currently $169.83, suggesting that the stock is fairly valued at its current price. This is a shift from three months ago when the GF Value was higher at $180.98, indicating that the stock was then considered modestly undervalued. The GF Value is a critical metric for investors as it provides an estimate of a stock's intrinsic value, taking into account historical multiples, past performance, and future business projections.
Introduction to Ferguson PLC
Ferguson PLC operates within the industrial distribution industry, specializing in the distribution of plumbing and HVAC products. The company has established a significant market presence, serving over 1 million customers and sourcing from 37,000 suppliers. Ferguson's extensive network includes approximately 1,700 branches across North America, complemented by online platforms and residential showrooms. With nearly $30 billion in sales for fiscal 2023, 95% of which were generated in the U.S., Ferguson stands as the largest industrial and construction distributor in North America. The company's strategic focus on the North American market has been reinforced by the divestiture of its U.K. business in 2021.
Assessing Ferguson's Profitability
Ferguson's Profitability Rank is an impressive 8/10, indicating strong performance relative to its industry peers. The company's operating margin stands at 9.36%, which is better than 71.92% of 146 companies in the same industry. This is a testament to Ferguson's efficient operational management. Furthermore, the company's return on equity (ROE) is a remarkable 38.92%, surpassing 97.92% of its competitors. Similarly, the return on assets (ROA) and return on invested capital (ROIC) are 12.15% and 18.59%, respectively, both of which are better than 91.16% of industry companies. These figures not only highlight Ferguson's profitability but also its ability to generate cash flow relative to the capital invested in the business. Over the past decade, Ferguson has maintained profitability, outperforming 99.3% of 142 companies in the industry.
Growth Trajectory of Ferguson PLC
The Growth Rank for Ferguson is an exceptional 9/10, reflecting the company's strong revenue and profitability expansion. The 3-year revenue growth rate per share is 13.90%, which is higher than 72.34% of 141 companies in the industry. Over a 5-year period, the revenue growth rate per share is 11.10%, surpassing 74.81% of 131 companies. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 4.74%, which is more favorable than 41.38% of 29 companies. The 3-year EPS without NRI growth rate is 25.00%, better than 61.54% of 117 companies, and the 5-year EPS growth rate is 22.90%, outperforming 74.12% of 85 companies. These growth metrics underscore Ferguson's strong position and potential for future expansion within the industry.
Notable Shareholders in Ferguson PLC
Several prominent investors have taken significant positions in Ferguson PLC. Nelson Peltz (Trades, Portfolio) holds 5,415,218 shares, representing a 2.66% stake in the company. Daniel Loeb (Trades, Portfolio) has invested in 1,275,000 shares, accounting for 0.63% of Ferguson's shares. First Pacific Advisors (Trades, Portfolio) owns 1,073,518 shares, equating to a 0.53% share percentage. These holdings reflect the confidence that these seasoned investors have in Ferguson's financial health and growth prospects.
Competitive Landscape
When compared to its competitors, Ferguson PLC holds a competitive market capitalization. Fastenal Co (FAST, Financial) has a market cap of $34.49 billion, W.W. Grainger Inc (GWW, Financial) is valued at $39.57 billion, and Watsco Inc (WSO, Financial) stands at $15.45 billion. These figures place Ferguson PLC in a strong position within the industrial distribution industry, highlighting its significant market share and competitive edge.
Conclusion
In summary, Ferguson PLC exhibits a robust financial health and a commanding market position. The company's recent stock performance, characterized by a 10.45% gain over the past three months, reflects investor confidence in its growth trajectory and profitability. Ferguson's impressive profitability and growth ranks, coupled with its strategic focus on the North American market, position it well for continued success. As the company continues to outperform industry averages in key financial metrics, its future outlook remains promising. Investors and market watchers will undoubtedly keep a close eye on Ferguson PLC as it continues to navigate the industrial distribution landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
