Goldman Sachs downgraded Ferguson to Neutral from Buy with a price target of $265, down from $315. The firm states that in the near term, it expects topline growth to remain subdued, with volumes impacted by ongoing weakness in residential construction markets, the analyst tells investors in a research note. While Goldman sees some pricing tailwinds for Q2 due to the spikes seen post the Middle East conflict, these appear to be reversing, suggesting any benefit is likely to be temporary, the firm states. For the rest of the year, a return to high-single-digit growth would likely require a recovery in volumes and stable inflation, both of which remain elusive at this stage, Goldman Sachs noted.
