Fact based stock research
Ferguson (LSE:FERG)

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How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Ferguson stock research in summary

fergusonplc.com

ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Ferguson (Trading & Distribution, Switzerland) shares have lower financial characteristics compared with similar stocks. Shares of Ferguson are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 29), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Ferguson's financial characteristics. As the company Ferguson's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 10), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	10
Growth Rank	49
Safety Rank	29
Combined Rank	4

Country	Switzerland
Industry	Trading & Distribution
Index	FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe, Water Tech
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ferguson

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	43	21	10
GROWTH
GROWTH	56	99	87	49
SAFETY
SAFETY	32	75	40	29
SENTIMENT
SENTIMENT	n/a	31	95	^new
360° VIEW
360° VIEW	n/a	79	88	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Ferguson is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	43	21	10
GROWTH
GROWTH	56	99	87	49
SAFETY
SAFETY	32	75	40	29
COMBINED
COMBINED	21	85	54	4

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Ferguson the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Ferguson shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Ferguson. Price-to-Sales is 28 which means that the stock price compared with what market professionals expect for future profits is higher than 72% of comparable companies, indicating a low value concerning Ferguson's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 8, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Ferguson. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 20 and Dividend Yield, which is lower than 79% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Ferguson's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Ferguson? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Ferguson? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Ferguson may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	24	50	40	28
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	36	35	33	20
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	3	22	13	8
DIVIDEND YIELD
DIVIDEND YIELD	49	54	26	21
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	24	43	21	10

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ferguson; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Ferguson shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Ferguson. Sales Growth has a rank of 59 which means that currently, professionals expect the company to grow more than 59% of its competitors. Both Profit Growth, with a rank of 59, and Stock Returns, with a rank of 64, are also above average. But Capital Growth only has a rank of 37, which means that, currently, professionals expect the company to grow its invested capital less than 63% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	53	87	63	59
PROFIT GROWTH
PROFIT GROWTH	90	88	54	59
CAPITAL GROWTH
CAPITAL GROWTH	n/a	81	63	37
STOCK RETURNS
STOCK RETURNS	63	61	89	64
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	56	99	87	49

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ferguson.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company Ferguson has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Ferguson is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Ferguson. Liquidity is at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 42, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 58% of its competitors. Leverage is also high at a rank of 28, which means that the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), Ferguson has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	57	54	26	28
REFINANCING
REFINANCING	11	41	43	42
LIQUIDITY
LIQUIDITY	59	100	77	66
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	32	75	40	29

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ferguson and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	37	41	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	2	97	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	61	94	^new
MARKET PULSE
MARKET PULSE	n/a	68	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	31	95	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ferguson.
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