RBC slashes Ferguson target price on rising discount rates

Analysts at RBC slashed their target price for Ferguson's shares in response to rising market interest rates and the "limited" number of short-term catalysts for the shares.

Their mid-cycle discounted cash flow-derived target price was lowered from 12,200.0p to 9,800.0p chiefly in response to the now higher discount rates applicable to those cash flows.

They also noted that the group appeared to have been overearning of late due to high inflation and moved to factor in a degree of slowdown in the macro picture.

Nevertheless, Ferguson had been executing well and looked good value when compared to its US peers, they said.

Index buying was also on its way.

The recommendation on the shares was unchanged