Berenberg has shifted its stance on Ferguson plc from “Buy” to “Hold” following a notable rally in the stock’s performance. Shares have surged roughly 25% year-to-date, nearing the firm’s updated price target of $215. With that run-up largely pricing in the near-term upside, the downgrade reflects a view that current valuations are fair rather than compelling.
📊 Despite the downgrade, Berenberg actually increased its EPS forecast for fiscal 2025 by 4%, signaling continued confidence in Ferguson’s core operations. The company continues to benefit from resilient construction demand in North America and effective cost management. However, from a valuation standpoint, the room for additional multiple expansion looks increasingly limited at current levels.
💰 Ferguson also remains an attractive name for dividend-focused investors. The company recently announced a quarterly dividend of $0.83 per share, which annualizes to $3.32 and yields about 1.57% based on current pricing. With a payout ratio of 29.7%, the dividend is well-supported by earnings, leaving room for potential increases if performance holds steady.
🔍 Ferguson’s fundamentals are sound, but with shares now trading close to their price target, the stock appears to have caught up to its growth story—warranting a more neutral outlook from Berenberg.