# Ferguson (FERG.US)

Canonical: https://gigainvestors.com/s/FERG

Analysis as of: 2026-10-16T07:28:30.124Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $228.76 per share; close as of 2026-10-15.

Estimated value: low $32.77 per share, central $37.10 per share, high $42.86 per share. Buy at or below the central value $37.10 per share. Valuation as of 2026-10-16T07:28:30.124Z; scenarios are not confidence intervals.

Expected annual return: 4.1% at the stated quote. About 4.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.15×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.08×

- FY2018: 0.07×

- FY2019: 0.06×

- FY2020: 0.07×

- FY2021: 0.09×

- FY2022: 0.10×

- FY2023: 0.09×

- FY2024: 0.09×

- FY2025: 0.08×

- FY2026: 0.10×

### moat: pass

- ROIC, median of available years: 26.3%

- ROIC, second-lowest year: 19.9%

- Typical minus recent gross margin: -0.2 pp

- Typical gross margin (annual median): 30.5%

- Recent gross margin (lower of latest and 3-year median): 30.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.3%

- ROIC including acquisitions, ten-year median: 18.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 26.7%

- FY2018: 25.8%

- FY2019: 28.4%

- FY2020: 19.9%

- FY2021: 31.4%

- FY2022: 30.0%

- FY2023: 27.6%

- FY2024: 22.8%

- FY2025: 23.1%

- FY2026: 7.4%

### economics: fail

- incremental invested capital return below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.00×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $8.3B

- Net income, five-year total: $8.3B

- Return on incremental invested capital: 2.0%

- Working capital / revenue, annual change: 2.8 pp

- Working capital / revenue, change between three-year averages: 17.7 pp

- Working capital / revenue, final three-year average: 30.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.01×

- FY2023: 1.00×

- FY2024: 0.98×

- FY2025: 1.04×

- FY2026: 0.94×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 26.7% vs 22.8%

- Per-share earnings: 3.86 to 8.62 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.1%

- Ordinary dilution, 5-year annual growth: -2.9%

- Market cap gain: $30B

- Cumulative retained earnings: $3.2B

- Diluted shares, 10-year annual growth: -2.1%

- Diluted shares, 5-year annual growth: -2.9%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 10.6%

- Per-share value change: $4.76

- Per-share value, starting three-year median: $3.86

- Per-share value, ending three-year median: $8.62

- Buybacks concentrated in cheaper years (correlation): 0.47

- Average buyback yield: 2.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $2.3B

- Cumulative net income, 10 years: $14B

- ROIC, first three-year median: 26.7%

- ROIC, last three-year median: 22.8%

Chart: Earnings per share; fiscal year observations.

- FY2017: $3.86

- FY2018: $5.47

- FY2019: $4.87

- FY2020: $4.24

- FY2021: $6.55

- FY2022: $9.69

- FY2023: $9.12

- FY2024: $8.62

- FY2025: $9.44

- FY2026: $3.43

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: -0.3%

- Receivables to sales index (DSRI): 3.77×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 4.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.08×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.59×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -0.2%

- FY2018: 2.3%

- FY2019: -1.6%

- FY2020: -6.7%

- FY2021: -0.5%

- FY2022: 6.2%

- FY2023: -5.2%

- FY2024: -0.8%

- FY2025: -0.3%

- FY2026: -0.3%

## Holders

- [Seth Klarman](https://gigainvestors.com/BAUPOST): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Henry Ellenbogen](https://gigainvestors.com/DCP): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [John Armitage](https://gigainvestors.com/EC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Francois Rochon](https://gigainvestors.com/GC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Ruane](https://gigainvestors.com/RC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Nelson Peltz](https://gigainvestors.com/TF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Wallace Weitz](https://gigainvestors.com/WIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Von Mueffling](https://gigainvestors.com/cc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 24.7% a year for ten years · sales -71.6%

Story as of 2026-10-16T09:58:45.113Z; price observation 2026-10-15.

Price needs cash profits to grow 24.7% a year for ten years

- 2025-06-03: Ferguson raises fiscal 2025 revenue growth outlook to low-to-mid single digits as margin expands ([seekingalpha.com](https://seekingalpha.com/news/4455094-ferguson-raises-fiscal-2025-revenue-growth-outlook-to-low-to-mid-single-digits-as-margin?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-12-09: Ferguson misses profit estimates in Q1, refines full-year outlook ([finance.yahoo.com](https://finance.yahoo.com/news/ferguson-misses-profit-estimates-q1-122859918.html))

### Sales · FY2025–2026

sales -71.6%; source https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm; observed 2023-09-26.

- FY2017: $19B 

- FY2018: $21B 

- FY2019: $22B 

- FY2020: $20B 

- FY2021: $23B 

- FY2022: $29B 

- FY2023: $30B 

- FY2024: $30B 

- FY2025: $31B 

- FY2026: $8.8B 

### Gross margin · FY2026

gross margin 31%; source https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm; observed 2023-09-26.

- FY2017: 29.0% 

- FY2018: 29.1% 

- FY2019: 29.3% 

- FY2020: 30.0% 

- FY2021: 30.6% 

- FY2022: 30.7% 

- FY2023: 30.4% 

- FY2024: 30.5% 

- FY2025: 30.7% 

- FY2026: 31.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in industrial distribution; annual sales are USD 8.8 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2026: revenue 8751000000; grossProfit 2712000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 30.5% to 31% during 2024–26; it earns 26.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2024: grossProfit / revenue = 30.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2025: grossProfit / revenue = 30.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2026: grossProfit / revenue = 31%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); 10-year return on capital observations [[2017,0.26677913279498144],[2018,0.25846889225551484],[2019,0.28378531000153384],[2020,0.1988430675808685],[2021,0.3136779576915197],[2022,0.2995084143163806],[2023,0.27603178388977306],[2024,0.22759027992117573],[2025,0.23050538574229454],[2026,0.07430504175034351]]; median 0.26262401252524814. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

These impacts were partially offset by sales price inflation of approximately 8%.

- Source: https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm (filed 2023-09-26); This decrease in net sales was primarily due to lower sales volumes, as well as a 5.5% unfavorable impact from foreign currency exchange rates. These impacts were partially offset by sales price inflation of approximately 8%. Adjusted operating profit for the Canada segment decreased compared with the prior year, primarily due to lower sales and associated lower gross profit, as well as higher SG&A costs due to intentional infrastructure investments in new branches.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 438 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2017: growth capex 0; upkeep 193818135; owner earnings 1153181865. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2018: growth capex 54000000; upkeep 245000000; owner earnings 1267000000. Growth capex / owner earnings = 0.042620363062352014.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2019: growth capex 93160976.34934008; upkeep 324839023.6506599; owner earnings 1071160976.3493401. Growth capex / owner earnings = 0.08697196631158573.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2020: growth capex 0; upkeep 302000000; owner earnings 941000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2021: growth capex 0; upkeep 246000000; owner earnings 1524000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2022: growth capex 0; upkeep 290000000; owner earnings 2133000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm (filed 2023-09-26); FY2023: growth capex 120000000; upkeep 321000000; owner earnings 1889000000. Growth capex / owner earnings = 0.06352567496029646.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2024: growth capex 0; upkeep 372000000; owner earnings 1698000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2025: growth capex 0; upkeep 305000000; owner earnings 1924000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2026: growth capex 0; upkeep 234000000; owner earnings 628000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); Dividend observations: [[2017,328000000],[2018,1359000000],[2019,445000000],[2020,327000000],[2021,1036000000],[2022,538000000],[2023,711000000],[2024,784000000],[2025,489000000],[2026,347000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); FY2026: cash repurchases 438000000 USD.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FERG.US SharesStats.PercentInsiders = 0.172 percentage points; cache date 2026-10-16.

### What could break it

"The Company’s strategy could be materially adversely affected by its indebtedness." (SEC filing, Sep 2023)

- Source: https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm (filed 2023-09-26); The Company’s strategy could be materially adversely affected by its indebtedness.

### What the price says

The price assumes cash profits grow 24.7% yearly over ten years; actual decline was 2.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2023-09-26); Ten-year compound average after fade. Initial solved rate 0.3482750891507965. Price 228.76; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 4.016507755703988 → FY2026 3.2371134020618557. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-11: $60.98 per share

- 2016-12: $63.67 per share

- 2017-01: $65.68 per share

- 2017-02: $66.10 per share

- 2017-03: $66.05 per share

- 2017-04: $66.16 per share

- 2017-05: $69.43 per share

- 2017-06: $65.52 per share

- 2017-07: $63.62 per share

- 2017-08: $61.40 per share

- 2017-09: $68.74 per share

- 2017-10: $74.66 per share

- 2017-11: $76.09 per share

- 2017-12: $75.98 per share

- 2018-01: $82.06 per share

- 2018-02: $75.13 per share

- 2018-03: $79.04 per share

- 2018-04: $81.47 per share

- 2018-05: $81.46 per share

- 2018-06: $79.32 per share

- 2018-07: $79.55 per share

- 2018-08: $79.90 per share

- 2018-09: $85.85 per share

- 2018-10: $65.86 per share

- 2018-11: $64.25 per share

- 2018-12: $62.92 per share

- 2019-01: $67.00 per share

- 2019-02: $70.58 per share

- 2019-03: $63.67 per share

- 2019-04: $70.70 per share

- 2019-05: $69.35 per share

- 2019-06: $71.02 per share

- 2019-07: $74.83 per share

- 2019-08: $70.97 per share

- 2019-09: $73.95 per share

- 2019-10: $85.00 per share

- 2019-11: $89.70 per share

- 2019-12: $91.61 per share

- 2020-01: $90.95 per share

- 2020-02: $90.65 per share

- 2020-03: $58.83 per share

- 2020-04: $71.50 per share

- 2020-05: $79.20 per share

- 2020-06: $82.15 per share

- 2020-07: $89.35 per share

- 2020-08: $97.86 per share

- 2020-09: $100.75 per share

- 2020-10: $100.40 per share

- 2020-11: $110.00 per share

- 2020-12: $118.50 per share

- 2021-01: $118.92 per share

- 2021-02: $120.75 per share

- 2021-03: $120.13 per share

- 2021-04: $126.50 per share

- 2021-05: $135.98 per share

- 2021-06: $139.54 per share

- 2021-07: $140.05 per share

- 2021-08: $144.46 per share

- 2021-09: $139.52 per share

- 2021-10: $151.21 per share

- 2021-11: $152.43 per share

- 2021-12: $179.39 per share

- 2022-01: $158.79 per share

- 2022-02: $152.24 per share

- 2022-03: $134.12 per share

- 2022-04: $124.71 per share

- 2022-05: $119.56 per share

- 2022-06: $110.71 per share

- 2022-07: $126.08 per share

- 2022-08: $115.49 per share

- 2022-09: $102.93 per share

- 2022-10: $109.26 per share

- 2022-11: $117.23 per share

- 2022-12: $126.97 per share

- 2023-01: $142.34 per share

- 2023-02: $144.10 per share

- 2023-03: $133.75 per share

- 2023-04: $140.82 per share

- 2023-05: $144.91 per share

- 2023-06: $157.31 per share

- 2023-07: $161.62 per share

- 2023-08: $161.56 per share

- 2023-09: $164.47 per share

- 2023-10: $150.20 per share

- 2023-11: $171.34 per share

- 2023-12: $193.07 per share

- 2024-01: $187.86 per share

- 2024-02: $211.45 per share

- 2024-03: $218.43 per share

- 2024-04: $209.90 per share

- 2024-05: $205.74 per share

- 2024-06: $193.65 per share

- 2024-07: $222.65 per share

- 2024-08: $205.71 per share

- 2024-09: $198.57 per share

- 2024-10: $196.74 per share

- 2024-11: $215.93 per share

- 2024-12: $173.57 per share

- 2025-01: $181.12 per share

- 2025-02: $177.50 per share

- 2025-03: $160.23 per share

- 2025-04: $169.66 per share

- 2025-05: $182.34 per share

- 2025-06: $217.75 per share

- 2025-07: $223.33 per share

- 2025-08: $231.15 per share

- 2025-09: $224.58 per share

- 2025-10: $248.50 per share

- 2025-11: $251.67 per share

- 2025-12: $222.63 per share

- 2026-01: $252.46 per share

- 2026-02: $260.76 per share

- 2026-03: $233.26 per share

- 2026-04: $267.71 per share

- 2026-05: $225.97 per share

- 2026-06: $237.33 per share

- 2026-07: $234.33 per share

- 2026-08: $224.51 per share

- 2026-09: $222.62 per share

- 2026-10: $222.86 per share

## Annual estimated value (USD per share)

- FY2017: low $44.88 per share, central $49.83 per share, high $56.41 per share

- FY2018: low $58.57 per share, central $66.40 per share, high $76.82 per share

- FY2019: low $64.49 per share, central $72.95 per share, high $84.22 per share

- FY2020: low $63.32 per share, central $71.00 per share, high $81.23 per share

- FY2021: low $70.18 per share, central $79.32 per share, high $91.48 per share

- FY2022: low $116.60 per share, central $169.68 per share, high $199.28 per share

- FY2023: low $132.28 per share, central $192.80 per share, high $226.56 per share

- FY2024: low $131.60 per share, central $186.69 per share, high $219.20 per share

- FY2025: low $144.14 per share, central $210.13 per share, high $246.94 per share

- FY2026: low $32.56 per share, central $36.87 per share, high $42.60 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Historical value ranges retain the original capex calculation; the current filing judgement is not backfilled into historical valuations

Prior published observations retained from 2026-10-15T06:34:11.850Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1832433/000183243323000066/ferg-20230731.htm); period 2023-07-31, filed 2023-09-26.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.