Ferguson PLC shares rise 1.27% to end week, Up 28% since rebrand

Ferguson PLC. (FERGY) shares are rallying to end the week, up 1.27% with a major rally since September. The company’s stock is up over 30% in September and 28% since its rebrand. The company, formerly known as Wolseley, rebranded to Ferguson in March 2017.

The plumbing wholesaler’s shares rose the most at the time in a decade after an earnings beat and plans by the company that has the potential to help put its stock on the New York and London stock exchanges.

Ferguson began reporting its currency in U.S. dollars to help move into the lucrative U.S. market.

The company’s revenue is largely attributed to U.S. sales, with the country accounting for 65% of sales. Ferguson’s stock is up this week on positive market indicators. The company has been relatively quiet in recent weeks.

Ferguson’s bottom line has not been greatly impacted as new technology lowers demand for the company’s products. The company is facing changes in plumbing supplies as trenchless sewer repair and other technologies continue to gain traction.

Earnings growth in 2018 has been 9.51% with last year’s earnings growth peaking at 33.23%. Revenue growth fell in 2017 with revenue dipping 7.47%.

Profit margins remain at 5.83% according to last year’s earnings. The company brought in $19.4 billion in revenue with an annual profit of $996.3 million.

The company has yet to release their most recent earnings report. Based off of the company’s history, we can expect the company to release their most recent earnings report sometime in mid-to-late March.

Ferguson’s rebrand also led to the selloff of underperforming units. The company sold its Nordics business because it was unprofitable. The company had plans to revitalize the business, which had $1.26 billion in sales in the first half of 2017. The plans fell through, as the company lacked synergies with other parts of its businesses to make it profitable.

The company’s October earnings call indicated that Q4 sales were up 8.15 in the final months of the year. Gross profit margins also rose by 0.4% compared to the year prior. Cash flow conversion remained excellent throughout the year, and trading profit rose 8.7%.

The United State accounted for $11.8 billion of the company’s sales and 89% of group trading profit. Sales in the United States rose 27.3% year-over-year, with trading profit also rising. Trading margins remained at 8.0%.

Business-to-consumer e-commerce sales in the US rose the most, with a 14.7% like-for-like change.

United Kingdom growth remained sluggish, with a 0.8% change to $2.012 billion. Like-for-like growth grew by a mere 1% and trading margins rose 0.1% to 3.8%.

Ferguson has been given a “hold” rating by several industry experts. Deutsche Bank and Peel Hunt have both placed a stock hold rating on the company. Zacks recently upgraded the company from a “hold” to “buy” rating with a target price of $9 a share. The company’s 12-month high is $7.97, with 12-month lows of $5.80 a share. Investors project full-year 2018 earnings to $0.41 a share, up from previous earnings projections