Ferguson Enterprises Inc (FERG.N): Raising Est on FloWorks and Large Capital Project Share Gains; Upgrade to Buy

Citi upgraded Ferguson Enterprises (FERG.N) to Buy from Neutral and raised its target price to $288 from $285, implying a 26.9% expected total return. Following a 13% share price decline since mid-August, Citi views valuation as compelling, with the FloWorks acquisition, large capital project share gains and more resilient residential exposure driving continued outperformance. Citi raised its 2026-27 EBITDA estimates above FactSet consensus and forecasts FY27 EBITDA of about $3.82bn on roughly 7% sales growth, the low end of Ferguson's 6-11% long-term algorithm, including about $90mn from FloWorks. Residential markets remain challenged, but Ferguson Home, HVAC and trade plumbing are relatively better positioned. The $288 target is based on 16.5x NTM EBITDA, below WSO's 18.2x five-year average. Key risks include weaker residential/non-residential demand, a US recession, FloWorks integration risk and greater competition.