Ferguson Enterprises shares rose 12.1% on 9 November, the day the plumbing and HVAC distributor released third-quarter results and raised its full-year sales growth guidance.
A guidance raise on top of an already strong quarter
Third-quarter net sales rose 9.5% to $9.0 billion, with 7.0% of that organic. Ferguson used the quarter to lift its calendar 2026 net sales guidance to about 7% growth, up from the mid-single-digit growth it had previously guided to, citing year-to-date performance and the addition of FloWorks, a valve and flow-control distributor acquired on 31 August. Adjusted operating margin guidance also edged up, to 9.6%-9.8% from 9.5%-9.8%.
The profit line was not uniformly positive. Adjusted operating profit rose 8.9% to $962 million and adjusted diluted EPS rose 7.9% to $3.43. On a GAAP basis, operating profit rose only 4.9% to $885 million and diluted EPS fell 4.9% to $3.08, which the company attributed to the timing and extent of tax benefits recorded in the year-ago quarter rather than to any deterioration in operations. Gross margin fell 40 basis points to 30.9%, which the release described as a comparison against a prior-year period temporarily lifted by the timing of supplier price increases. A reader relying only on the GAAP EPS line would have seen a decline; the guidance raise and the adjusted operating metrics are the more direct explanation for the share reaction.
Sizing the move
The 12.1% rise is 6.3x the stock's typical daily move over the past year of 1.9%, and the largest move in this direction since 3 June 2025. It also outpaced the broader market, where the S&P 500 (SPY) gained 2.6% the same session, and exceeded the 5.3% median move among other covered trading and distribution companies that day, consistent with a company-specific catalyst rather than a sector-wide one.
What Ferguson's growth re-acceleration means for its valuation
The guidance raise bears most directly on the growth assumption in our discounted cash flow model, which currently sets its base-case stage-one growth input at 4.5%, drawn from trailing-twelve-month revenue growth. Our model shows that a 5 percentage-point increase in that growth assumption, holding everything else fixed, changes the model's value per share by 37.3%. Ferguson's new guidance points to full-year growth above the trailing figure the model currently uses, though the 8-K gives a calendar-year target rather than a figure stated on the same trailing basis, so the two cannot be read as directly interchangeable. These are model values under stated assumptions, not a comparison with the share price.
What would confirm or unwind this
Ferguson's provisional calendar lists results for the quarter ending 31 December 2026 on 16 February 2027. That report will show whether the 15% non-residential growth and the FloWorks contribution continue at a similar pace once the acquisition has been in the base for a full quarter, and whether the gross-margin pressure the company linked to prior-year supplier pricing timing persists or proves temporary. A full financial history for the company is available on the Ferguson company page.