Ferguson (NYSE:FERG) Board of Directors Initiates Stock Repurchase Program

Key Points

• Ferguson’s Board approved a $2.0 billion stock repurchase program to buy up to 3.9% of shares, signaling management believes the shares are undervalued.
• The company reported Q1 EPS of $2.28 (beat the $2.14 consensus) and revenue of $7.47 billion, but EPS was down year‑over‑year and the stock fell about 3.1% intraday.
• Ferguson declared a quarterly dividend of $0.89 (annualized $3.56, ~1.4% yield) and holds a consensus analyst rating of "Moderate Buy" with a $267.27 price target.

Ferguson (NYSE:FERG - Get Free Report) announced that its Board of Directors has initiated a stock repurchase program on Tuesday, May 5th, RTT News reports. The company plans to repurchase $2.00 billion in shares. This repurchase authorization allows the company to purchase up to 3.9% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's management believes its shares are undervalued.

Ferguson Stock Down 3.1%

Shares of Ferguson stock traded down $7.99 during midday trading on Tuesday, reaching $252.81. 1,962,127 shares of the company's stock traded hands, compared to its average volume of 1,344,436. The company has a debt-to-equity ratio of 0.68, a quick ratio of 1.01 and a current ratio of 1.88. Ferguson has a 52 week low of $166.04 and a 52 week high of $271.64. The company's 50 day simple moving average is $243.88 and its 200 day simple moving average is $243.90. The company has a market cap of $49.14 billion, a price-to-earnings ratio of 25.54, a price-to-earnings-growth ratio of 1.96 and a beta of 1.23.

Ferguson (NYSE:FERG - Get Free Report) last posted its earnings results on Tuesday, May 5th. The company reported $2.28 EPS for the quarter, topping the consensus estimate of $2.14 by $0.14. Ferguson had a net margin of 6.93% and a return on equity of 40.37%. The firm had revenue of $7.47 billion for the quarter. During the same period in the previous year, the company earned $2.50 earnings per share. The company's quarterly revenue was up 3.6% compared to the same quarter last year. Equities analysts expect that Ferguson will post 11.2 earnings per share for the current fiscal year.

Ferguson Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, July 8th. Investors of record on Friday, May 15th will be issued a $0.89 dividend. This represents a $3.56 annualized dividend and a yield of 1.4%. The ex-dividend date is Friday, May 15th. Ferguson's payout ratio is 35.96%.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on FERG shares. Truist Financial increased their target price on shares of Ferguson from $260.00 to $300.00 and gave the stock a "buy" rating in a research report on Wednesday, February 25th. Oppenheimer increased their target price on shares of Ferguson from $255.00 to $280.00 and gave the stock an "outperform" rating in a research report on Wednesday, February 25th. Sanford C. Bernstein reiterated an "outperform" rating on shares of Ferguson in a research report on Thursday, January 8th. UBS Group increased their target price on shares of Ferguson from $220.00 to $252.00 and gave the stock a "neutral" rating in a research report on Wednesday, February 25th. Finally, Morgan Stanley reiterated an "overweight" rating on shares of Ferguson in a research report on Tuesday, January 6th. Two equities research analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $267.27.

Trending Headlines about Ferguson

Here are the key news stories impacting Ferguson this week:

• Positive Sentiment: Quarterly results: Ferguson beat consensus EPS ($2.28 vs. $2.14) and delivered revenue of $7.47B, with management highlighting strength in non‑residential/capital projects — a sign the company can win large contracts and sustain margin mix benefits. Ferguson Reports First Quarter
• Positive Sentiment: Strategic partnership: Ferguson formed an alliance with Contractor Commerce to improve digital/e‑commerce capabilities for contractor customers — could help drive share gains and digital sales growth over time. Contractor Commerce Alliance
• Positive Sentiment: Analyst sentiment: Brokerages give Ferguson an average "Moderate Buy" rating, indicating continued analyst support despite mixed quarter — a counterweight to near‑term selling. Analyst Rating
• Neutral Sentiment: SEC/Form filings: Ferguson filed a Form 8‑K related to its annual meeting and disclosed vesting of restricted stock units for directors/PDMRs — routine governance and compensation disclosures with no direct cash‑flow impact. Form 8-K
• Neutral Sentiment: PDMR shareholding disclosure: Restricted stock units vested for directors (disclosed in a notice) — standard compensation reporting rather than insider selling. PDMR Shareholding
• Negative Sentiment: Earnings-call tone & headline metrics: The earnings call transcript reiterates a "challenging market" backdrop, year‑over‑year EPS decline (from $2.50 to $2.28) and only modest revenue growth (3.6%), which likely prompted caution from investors despite the beat. Earnings Call Transcript
• Negative Sentiment: Potential headline noise: Local news stories referencing "Ferguson" (city-level votes rejecting tax abatements/data center proposals) and unrelated media about public figures named Ferguson are creating search/activity noise; these items are not company actions but can confuse sentiment in the short term. City Council Rejects Tax Abatement Data Center Rejection

About Ferguson

Ferguson NYSE: FERG is a multinational distributor specializing in plumbing and heating products and related building supplies, serving professional contractors, builders and industrial customers. The company supplies a broad range of products used in residential, commercial and infrastructure projects, including pipes and fittings, valves and controls, HVAC equipment, waterworks materials, plumbing fixtures, pumps and accessories, as well as complementary electrical and specialty product lines.

Ferguson operates a network of branches and distribution centers that provide inventory, logistics and value-added services to trade customers.

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