Ferguson Enterprises Inc. (FERG): A Bull Case Theory 

We came across a bullish thesis on Ferguson Enterprises Inc. on Beeli Capital’s Substack by Andrew Beeli. In this article, we will summarize the bulls’ thesis on FERG. Ferguson Enterprises Inc.’s share was trading at $233.03 as of September 22nd. FERG’s trailing and forward P/E were 25.00 and 21.41 respectively according to Yahoo Finance.

Ferguson plc (FERG) is a leading distributor of building products, serving both residential and non-residential markets with a wide array of plumbing, HVAC, waterworks, and construction supplies. Founded in the 1950s, FERG holds top positions across multiple end markets, including Residential Trade Plumbing, HVAC, Residential Building and Remodel, Waterworks, Commercial/Mechanical, Fire & Fabrication, and Industrial sectors.

The company’s scale, expertise, and proximity to customers—within 60 miles of 95% of its base—allow it to provide rapid delivery, technical guidance, and project support, which strengthens customer loyalty and enables repeat business. In 2025, FERG achieved organic growth of 1% in its Residential segment versus a 3% sector decline and 6% growth in Non-Residential versus flat sector growth, outperforming its peers by roughly 500 basis points.

FERG’s competitive moat is anchored in distribution volume, broad product offerings, and specialized knowledge in water-related and dual-trade projects. Its scale allows for favorable supplier terms, and the company effectively targets professional customers who require both HVAC and plumbing solutions. Competitors such as Home Depot, Lowe’s, CNM, and Grainger exist but do not match Ferguson’s breadth, construction focus, or municipal water expertise. The company maintains gross margins around 30%, operating margins of 9–10% (adjusted 11.4% in Q4), and an ROIC of 30% in 2023–2024, reflecting efficient operations and strong capital allocation.

Looking ahead, FERG is positioned to benefit from reshoring, data center growth, and ongoing market share gains, with mid-single-digit revenue growth and mid- to high-single-digit free cash flow growth expected over the next five years. Potential upside catalysts include inclusion in the S&P 500, which could re-rate the stock. Risks include recession, softness in housing markets, and margin pressures, but the company’s scale, expertise, and consistent profitability provide a resilient investment profile. FERG offers an attractive risk/reward opportunity, combining stable growth, strong cash flow, and potential index-driven upside.

Previously we covered a bullish thesis on Pool Corporation (POOL) by Douglas Ott in April 2025, which highlighted the company’s resilience in non-discretionary pool maintenance, pricing power, and long-term growth potential despite a COVID-era demand hangover. The company’s stock price has appreciated approximately by 7.31% since our coverage. The thesis still stands as POOL’s core business remains essential. Andrew Beeli shares a similar perspective but emphasizes Ferguson Enterprises’ scale, breadth, and market share gains.

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Disclosure: None.