Jefferies Has a Positive Outlook on Ferguson Enterprises (FERG)

Ferguson Enterprises Inc. (NYSE:FERG) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for FERG suggests an upside of 17%; however, the Street high indicates an upside of 38%. Seth Klarman owns a $259.5 million stake in Ferguson Enterprises Inc. (NYSE:FERG) as of the third quarter of 2025, which represents 5.42% of the billionaire’s total holdings.

On December 2, Ryan Merkel, an analyst at William Blair, maintained a Buy recommendation on Ferguson Enterprises Inc. (NYSE:FERG). Merkel’s bullish call is based on multiple factors that have contributed to robust performance across large projects and plumbing. The analyst noted that while the HVAC and residential sectors warrant some degree of concern, the overall stance for 2026 was optimistic. This is due to FERG’s comparative advantage in megaprojects and contractor strategies.

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Similarly, Ferguson received another Buy rating from Jefferies on December 2, and the firm lifted the price target on the shares from $268 to $289. According to Jefferies, the residential market is likely to remain slow, and the company will see customer activity drop in its branches. Historically, in-store foot traffic has had a modest linear relationship with sales revenue and volume at Ferguson. This could potentially affect the company’s revenue growth, which came in at 3.8% for the past year.

Online activity at fergusonhome.com has remained soft during the first quarter of fiscal 2026, down 25%, 39%, and 42% in August, September, and October, respectively. The investment firm believes that this could be due to the website’s rebranding, as well as weaker DIY demand. On the other hand, household HVAC numbers have taken a hit because of tough economic conditions and customers favoring repairs over swaps, which impacts short-term demand.

Consequently, Jefferies sees headwinds in terms of clearing out inventory throughout H1 of FY2026. Nevertheless, sell-through should remain healthy. FERG, despite these headwinds, has been reaping gains from initiatives prioritizing dual trade contractors, and this has helped the company outperform the market.

Ferguson Enterprises Inc. (NYSE:FERG) is a Virginia-based company that sells plumbing, HVAC, lighting, appliances, and water and wastewater products to both residential and commercial customers.

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