Ferguson PLC (LON:FERG) – the plumbing supplies group formerly known as Wolseley – got a boost today from an upgrade in rating by Citigroup to ‘buy’ from ‘hold’.
In a note to clients, the US bank’s analysts said they believe the FTSE 100-listed firm’s upcoming full year results – due on October 3 - is “likely to be key catalyst for the stock and will give a clearer view on group's capital allocation strategy, share buyback/sp.dividend opportunity and growth prospects.”
READ: Wolseley unveils name change, as it posts profits rise driven by US growth
They noted that Ferguson’s share price performance has been weak so far, down around 8% in the year-to-date, and trimmed their price target for the stock to 5,220p.
In late morning trading, Ferguson shares were up 1.8%, or 83p at 4,657p.
The analysts concluded: “We believe the shares look good value given the potential for organic and inorganic growth opportunities and share buybacks supported by FCF yield of 6.0%.”