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Dec 5 2017, 08:15 GMT
Under a new name and in a different reporting currency, the Ferguson performance is little changed. It continues to generate above market organic growth (Q1: 7.6%) and steady margin progress (+30bps year-on-year (yoy)). Impressive cash flow generation (and in recent times portfolio refinement) is generating surplus capital. In turn, this capital is being returned to shareholders. We do not expect to make material changes to our current forecast. The stock is currently trading at 17.6x on calendarised 2018F estimate. Its impressive business model is fairly valued in our view — we reiterate our ‘Neutral’ recommendation.