Canaccord ups target on Ferguson, says US macro and listing plans are 'key'
By Alexander Bueso
Date: Wednesday 04 Dec 2019
(Sharecast News) - Analysts at Canaccord Genuity revised their target price for shares of plumbers' merchant Ferguson higher, highlighting to clients the company's outperformance versus a flat market in the States, plans to de-merge its UK operations and for a full US listing.
Macroeconomic conditions in the US would be the key driver of the shares in 2020, they said.
Yet the company was holding up well thus far, with organic growth in the States of 3.0%, despite a flat underlying market, and with weaker comparables from the third quarter onwards set to help growth rates.
Then there was the spin-off of the UK operations - likely in the first half of 2020 - and the possible conclusion regarding listing structure of the group.
A move to a full US listing was likely to be supportive for the stock as American peers tended to sport higher ratings, the analysts said.
And being wholly US-focused and listed could improve the company's financial performance and medium-term opportunities.
Nonetheless, said Canaccord, "how easily and quickly this can be achieved remains unclear."
Canaccord upped its target for the shares from 6,270.0p to 6,590.0p and kept its recommendation at a 'hold'.
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