European Investor
10 Aug 2026, 14:22
# Ferguson Stock Rises 3.4% After Q2 Earnings and Higher 2026 Guidance
Ferguson Enterprises (NYSE: FERG) shares rose about 3.4% Monday after the plumbing and HVAC distributor reported solid second-quarter growth and raised its full-year 2026 outlook.
Ferguson reported Q2 sales of $8.75 billion, up 4.6% year over year, supported by 3.8% organic growth and a 1% contribution from acquisitions. Reported diluted EPS increased 6.9% to $3.43, while adjusted EPS rose 5.3% to $3.39.
Operating profit increased 6.1% to $893 million, while adjusted EBITDA rose 3.2% to $994 million.
## Ferguson Raises 2026 Sales Outlook
The strongest catalyst for FERG shares appears to be management's improved outlook.
Ferguson now expects 2026 net sales to grow at a mid-single-digit rate, compared with its previous forecast for low- to mid-single-digit growth. The company also tightened its adjusted operating margin forecast to 9.5%-9.8% from 9.4%-9.8%.
The guidance increase is particularly notable given management's acknowledgment that the broader economic environment remains uncertain.
U.S. sales increased 5% during the quarter, with organic growth of 4%. Non-residential revenue was particularly strong, rising 8% as large capital projects and bidding activity remained healthy. Residential revenue returned to growth with a 2% increase despite continued weakness in new housing construction and repair and remodeling markets.
Acquisitions Add to Growth Strategy
Ferguson also continued its acquisition strategy, completing five transactions during the quarter across HVAC, commercial, waterworks and industrial markets.
The company subsequently agreed to acquire FloWorks, a distributor specializing in valves and flow-control solutions. Ferguson said the eight acquisitions announced year-to-date represent approximately $1.4 billion in annualized revenue.
The updated 2026 guidance does not yet include the expected contribution from FloWorks, which is scheduled to close during the third quarter.
Why Is FERG Stock Up Today?
Monday's roughly 3.4% gain appears to reflect a combination of solid earnings, resilient U.S. demand and, most importantly, the upward revision to full-year guidance.
There were some softer points. Gross margin declined 20 basis points to 31%, while adjusted operating margin slipped 10 basis points to 10.7%. Canadian sales also declined 1.9%.
However, these pressures were outweighed by accelerating non-residential demand, renewed residential growth and management's increased confidence in the full-year outlook.
With Ferguson also returning $202 million through share repurchases during the quarter and maintaining relatively modest net leverage of 1.3 times adjusted EBITDA, investors appear to be focusing on the company's ability to continue growing despite a challenging construction and housing environment.
Ferguson Enterprises (NYSE: FERG) shares rose about 3.4% Monday after the plumbing and HVAC distributor reported solid second-quarter growth and raised its full-year 2026 outlook.
Ferguson reported Q2 sales of $8.75 billion, up 4.6% year over year, supported by 3.8% organic growth and a 1% contribution from acquisitions. Reported diluted EPS increased 6.9% to $3.43, while adjusted EPS rose 5.3% to $3.39.
Operating profit increased 6.1% to $893 million, while adjusted EBITDA rose 3.2% to $994 million.
## Ferguson Raises 2026 Sales Outlook
The strongest catalyst for FERG shares appears to be management's improved outlook.
Ferguson now expects 2026 net sales to grow at a mid-single-digit rate, compared with its previous forecast for low- to mid-single-digit growth. The company also tightened its adjusted operating margin forecast to 9.5%-9.8% from 9.4%-9.8%.
The guidance increase is particularly notable given management's acknowledgment that the broader economic environment remains uncertain.
U.S. sales increased 5% during the quarter, with organic growth of 4%. Non-residential revenue was particularly strong, rising 8% as large capital projects and bidding activity remained healthy. Residential revenue returned to growth with a 2% increase despite continued weakness in new housing construction and repair and remodeling markets.
Acquisitions Add to Growth Strategy
Ferguson also continued its acquisition strategy, completing five transactions during the quarter across HVAC, commercial, waterworks and industrial markets.
The company subsequently agreed to acquire FloWorks, a distributor specializing in valves and flow-control solutions. Ferguson said the eight acquisitions announced year-to-date represent approximately $1.4 billion in annualized revenue.
The updated 2026 guidance does not yet include the expected contribution from FloWorks, which is scheduled to close during the third quarter.
Why Is FERG Stock Up Today?
Monday's roughly 3.4% gain appears to reflect a combination of solid earnings, resilient U.S. demand and, most importantly, the upward revision to full-year guidance.
There were some softer points. Gross margin declined 20 basis points to 31%, while adjusted operating margin slipped 10 basis points to 10.7%. Canadian sales also declined 1.9%.
However, these pressures were outweighed by accelerating non-residential demand, renewed residential growth and management's increased confidence in the full-year outlook.
With Ferguson also returning $202 million through share repurchases during the quarter and maintaining relatively modest net leverage of 1.3 times adjusted EBITDA, investors appear to be focusing on the company's ability to continue growing despite a challenging construction and housing environment.
