FERG

Ferguson Plc.

Consumer, Industrial/Transportation


Presented:10/11/2022
Price:$108.57
Cap:$24.52B
Current Price:$200.09
Cap:$40.41B

Presented

Date10/11/2022
Price$108.57
Market Cap$24.52B
Ent Value$33.92B
P/E Ratio11.14x
Book Value$21.72
Div Yield2.31%
Shares O/S225.83M
Ave Daily Vol571,186
Short IntN/A

Current

Price$200.09
Market Cap$40.41B
Ferguson Plc engages in the supply of plumbing and heating products to professional contractors and consumers, repair, maintenance and improvement and new construction markets through its subsidiaries. The company was founded in 1887 and is headquartered in Wokingham, the United Kingdom.

Publicly traded companies mentioned herein: Ferguson PLC (FERG), Home Depot Inc (HD), Lowe’s Companies Inc (LOW)

Highlights

The presenter is long shares of Ferguson PLC (FERG), formerly Wolseley in the UK, which recently completed the process of redomiciling in the US and changing its primary listing to the NYSE. FERG is now a pure-play US distributor with a ~50/50 residential/non-residential business mix. Despite solid fundamental performance, the stock has underperformed its peer group due to technical factors related to the listing change, creating an attractive entry point (8x his FY2023 EBITDA, 11x his FY2023 EPS) for a high-quality distributor with just 1 turn of leverage. Based on limited downside to numbers and the technical overhang turning into a tailwind, he likes the risk/reward setup and sees valuation upside to 12x – 14x EBITDA and 18x – 20x EPS. In his base case, he models $10 of EPS and applies 17x to reach a $170 price target (55% upside).

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Idea Discussion

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