GET DAILY SIGNALSFerguson (FERG) Posts +9.5% Sales Growth in Q3 and Raises Full-Year Outlook
Key Takeaways
- Net sales rose 9.5% year over year to $9.03 billion, driven by 7% organic growth and 2.7% from acquisitions.
- Adjusted diluted earnings per share (EPS) came in at $3.43, ahead of the FactSet consensus estimate of roughly $3.31.
- Management raised its full-year 2026 net sales outlook to approximately 7% growth, up from a prior mid-single-digit target.
- Nonresidential sales climbed 15%, while the Industrial segment surged 55% on broad-based demand.
- The FloWorks acquisition closed, expanding Ferguson's total addressable market from $340 billion to $400 billion.
- Share buybacks were temporarily paused, with net debt to adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) at 1.7x.
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Earnings Context and Why It Matters
Ferguson Enterprises stands as North America’s largest value-added distributor of essential water and air solutions for professional contractors in both residential and nonresidential construction. The third-quarter numbers provide a clear window into how the company is handling a split demand picture, with residential markets remaining soft while large capital projects in data centers, power generation, and advanced manufacturing pick up speed. After quarters of careful cost control and growth through acquisitions, the focus was on whether margins could hold during integration of the sizable FloWorks transaction that broadened its industrial flow-control reach.
Reported Results
In the fiscal third quarter ended September 30, 2026, Ferguson recorded net sales of $9.03 billion, up 9.5% from the year-ago quarter. Organic growth contributed 7.0% and acquisitions added 2.7%, with a minor 0.2% offset from Canadian divestments. Adjusted diluted EPS reached $3.43, beating the FactSet consensus of about $3.31, while reported EPS of $3.08 fell 4.9% due to the timing of tax benefits in the prior period. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted operating profit rose 8.9% to $962 million and the adjusted operating margin stayed steady at 10.7%. Gross margin came in at 30.9%, 40 basis points lower than a year earlier because of the timing of supplier price actions. U.S. net sales increased 10.2%, supported by a 15% rise in nonresidential revenue and a 6% gain in residential revenue. The Industrial segment advanced 55% overall and 32% on an organic basis, reflecting strength across power generation, refining, and mining.
Management lifted its full-year 2026 outlook, now calling for net sales growth of roughly 7% and an adjusted operating margin between 9.6% and 9.8%. Interest expense is expected near $235 million, capital expenditures around $425 million, and the adjusted effective tax rate remains about 26%.
Market Reaction and Investor Sentiment
Shares of Ferguson moved higher in Monday trading, climbing approximately 12% after the results and the improved guidance. Investors welcomed the faster nonresidential momentum, solid organic expansion, and the strategic fit of the FloWorks deal. The pause in buybacks was seen as a reasonable step tied to the acquisition financing, especially since leverage stayed inside the company’s 1x–2x net debt to adjusted EBITDA target band.
Forward Outlook and Key Factors to Monitor
With raised guidance and a balance sheet that supports further acquisitions, Ferguson heads into the final quarter in a solid position. Attention will turn to whether activity on large capital projects and open-order volumes keep nonresidential demand robust, particularly in commercial/mechanical and industrial segments linked to data centers, pharmaceuticals, and power generation.
Residential markets continue to show softness, with management noting pressure on permits and starts. Any improvement or additional weakness in housing will influence results in the Ferguson Home, residential trade plumbing, and HVAC areas. Cost items such as freight and fuel, along with the path of price inflation that moved from low-single to low-to-mid-single digits this quarter, also warrant watching.
Integration progress on FloWorks and the timing of a return to share repurchases remain important items. Management expects to restart buybacks once leverage moves toward the lower end of the 1x–2x range, provided no major new deals emerge. The next earnings release covers the period ending December 31, 2026.
Using Tickeron’s AI Screener for Additional Context
In my own research, I frequently turn to Tickeron’s AI Screener to scan industrial distributors and benchmark metrics similar to those highlighted in Ferguson’s quarter. The tool helps surface comparable names by combining technical patterns, fundamentals, and performance filters in one place, which can save time when evaluating peers or related opportunities.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
FERG in upward trend: price rose above 50-day moving average on October 20, 2026
FERG moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend. In 25 of 34 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 74%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 14, 2026. You may want to consider a long position or call options on FERG as a result. In 62 of 86 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 72%.
The 10-day moving average for FERG crossed bullishly above the 50-day moving average on October 23, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 12 of 18 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 67%.
Following a +4.74% 3-day Advance, the price is estimated to grow further. Considering data from situations where FERG advanced for three days, in 223 of 327 cases, the price rose further within the following month. The odds of a continued upward trend are 68%.
The Aroon Indicator entered an Uptrend today. In 174 of 313 cases where FERG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 56%.
Bearish Trend Analysis
The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 41 of 67 cases where FERG's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 61%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FERG declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 58%.
FERG broke above its upper Bollinger Band on November 09, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 22 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 66, placing this stock better than average.
The Tickeron SMR rating for this company is 31 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 42 (best 1 - 100 worst), indicating steady price growth. FERG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 62 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 76 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.291) is normal, around the industry mean (4.173). P/E Ratio (23.606) is within average values for comparable stocks, (2.286). Projected Growth (PEG Ratio) (1.426) is also within normal values, averaging (2.538). Dividend Yield (0.015) settles around the average of (0.448) among similar stocks. P/S Ratio (1.351) is also within normal values, averaging (3.013).
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