On Thursday, Jefferies confirmed its Buy rating on Ferguson Plc. (NYSE: FERG) with a steady price target of $244.00. The endorsement follows recent meetings with Ferguson's CEO Kevin Murphy and CFO Bill Brundage, where growth prospects were discussed. The firm noted Ferguson's potential to outpace its market significantly.
Ferguson's management team is optimistic about the company's ability to exceed market performance by 300 to 400 basis points. This confidence is rooted in Ferguson's strategy of scaling local relationships and enhancing value-added services. The company has been actively investing in its Main Distribution Centers (MDCs), which has led to an enhanced supply chain offering a wider range of products, along with improved labor productivity and reduced transportation costs.
Further emphasizing Ferguson's growth trajectory, the company has been expanding its capabilities in the Heating, Ventilation, and Air Conditioning sector. Accelerated growth in this segment is particularly noteworthy. Management anticipates modest organic growth in the second half of the year, accompanied by low single-digit (LSD) pricing increases in finished goods.
Jefferies' revenue estimate for Ferguson in 2024 is slightly above the consensus, indicating a positive outlook for the company's financial performance. The firm's analysis suggests that Ferguson is well-positioned to capitalize on its strategic investments and market positioning in the upcoming periods.
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