DCF Studio

    FERG · NYQ · Industrials

    Ferguson Enterprises Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 189.14

    Market price

    USD 242.16

    Implied upside

    -21.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-07-31

    Value Per Share

    Perpetuity growth
    USD 189.14-21.9%
    Exit multiple
    USD 264.65+9.3%
    Market price
    USD 242.16

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 33.1bnUSD 35.5bnUSD 37.9bnUSD 40.2bnUSD 42.4bnUSD 44.5bnUSD 46.5bnUSD 48.2bnUSD 49.7bnUSD 50.9bn+4.9%
    EBITUSD 3.1bnUSD 3.3bnUSD 3.5bnUSD 3.7bnUSD 3.9bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.6bnUSD 4.7bn+4.9%
    NOPATUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bn+4.9%
    Add depreciation & amortisationUSD 370.3mUSD 397.5mUSD 424.2mUSD 450.1mUSD 475.0mUSD 498.3mUSD 519.8mUSD 539.1mUSD 555.8mUSD 569.7m+4.9%
    Less capital expenditureUSD -392.6mUSD -433.4mUSD -475.4mUSD -518.2mUSD -561.3mUSD -604.0mUSD -645.8mUSD -686.2mUSD -724.3mUSD -759.8m+7.6%
    Capex, % of revenue1.2%1.2%1.3%1.3%1.3%1.4%1.4%1.4%1.5%1.5%-
    Less increase in working capitalUSD -348.9mUSD -363.3mUSD -357.8mUSD -347.6mUSD -332.5mUSD -312.5mUSD -287.5mUSD -257.9mUSD -224.0mUSD -186.0m-6.8%
    Free cashflow to firmUSD 2.0bnUSD 2.2bnUSD 2.4bnUSD 2.5bnUSD 2.7bnUSD 2.8bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+5.6%
    Discount factor0.95860.88070.80920.74360.68320.62770.57680.53000.48690.4474-
    Present valueUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.8bnUSD 1.7bnUSD 1.7bnUSD 1.6bnUSD 1.5bn-
    Present Value Of The ForecastUSD 17.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.072Reported 1.107, pulled toward 1.0 (Blume)
    Cost of equity9.43%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 14.1x interest cover. Book interest / average debt was lower, at 3.3%.
    Market capitalisationUSD 46.8bn88.7% of capital
    Total debtUSD 6.0bn11.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.83%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 189.14

    59% of EV

    Forecast FCFF, final year
    USD 3.3bn
    Capex at depreciation, working capital in reinvestment
    USD 3.9bn
    Less reinvestment at g/ROIC (10.6% of NOPAT)
    USD -413.1m
    Capitalised
    USD 3.5bn
    ROIC (reported)
    23.6%
    Terminal value, undiscounted
    USD 56.4bn
    Terminal value, discounted
    USD 25.2bn
    Enterprise value
    USD 43.0bn
    Less net debt
    USD 5.3bn
    Equity value
    USD 37.7bn

    Exit at 17.0x EBITDA

    Value per shareUSD 264.65

    69% of EV

    Terminal value, undiscounted
    USD 90.0bn
    Terminal value, discounted
    USD 40.3bn
    Enterprise value
    USD 58.0bn
    Less net debt
    USD 5.3bn
    Equity value
    USD 52.7bn

    Spread between methods: 33%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.83%259.29273.66291.58314.43344.42
    7.83%212.19220.57230.69243.11258.60
    8.83%178.08183.14189.14196.32205.02
    9.83%152.27155.37159.01163.30168.41
    10.83%132.09133.97136.18138.77141.82

    Outlined: this model. Green text: above today's price of 242.16. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.5%5.2%8.1%
    EBIT margin9.9%9.3%11.5%
    Discount rate-8.8%7.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.