12 Best HVAC Stocks to Buy Now

3. Ferguson Enterprises Inc. (NYSE:FERG)

Number of Hedge Fund Holders: 87

On January 15, Barclays analyst Matthew Bouley raised his price target on Ferguson Enterprises Inc. (NYSE:FERG)  to $278 from $267 and reiterated an Overweight rating on the stock. The update came as Barclays refreshed its targets across the homebuilding and building products space ahead of fourth-quarter earnings.

In his note to investors, Bouley said builders continue to face margin pressure as demand remains “choppy” and inventory levels stay elevated. He also pointed to government policy as a mixed factor, “driving potential negatives and positives together,” which adds another layer of uncertainty for the sector. Against that backdrop, Barclays said it is staying selective within building products as companies head into Q4 reporting.

During the company’s third-quarter 2025 earnings call, CEO Kevin Murphy said Ferguson continued to execute its growth strategy well despite a difficult market backdrop. He reported sales of $8.2 billion, representing a 5% increase from the prior year. According to Murphy, organic growth accounted for 4% of that increase, while acquisitions contributed another 1%. He also pointed to gross margin expansion to 30.7%.

Murphy said operating profit rose 14% year over year to $808 million, while diluted earnings per share increased nearly 16% to $2.84. He highlighted recent capital allocation actions, noting,

“We declared a 7% increase to our quarterly dividend to $0.89 per share, and we acquired Moore Supply Company, HVAC equipment and supplies business in the Chicago metro area.”

Turning to end markets, Murphy said residential conditions remain under pressure, with residential revenue down 1%. In contrast, nonresidential revenue grew 12%. He noted that U.S. Waterworks revenue increased 14%, while HVAC revenue declined 6%, which he attributed to industry transitions and continued weakness in residential construction.

Ferguson Enterprises Inc. (NYSE:FERG) operates as a value-added distributor, supplying specialized products and services to professional customers across both residential and non-residential construction markets in North America.