LOW - Greater Visibility To U.S. Investors Could Improve Ferguson's Valuation

• With the eventual disposal of the U.K. operations and a relisting process, Ferguson is pivoting toward becoming a much more U.S.-centric plumbing and heating distributor.
• The core operations remain strong, with Ferguson gaining share in the U.S. market for a decade and offering a compelling mix of physical branches, online sales, and elevated service levels.
• Margin leverage is increasingly difficult for distributors; improved scale in the U.S. and an expanded private assortment should help, but most of the opportunities will be "back office" savings.
• Ferguson looks priced for a decent return, and the shares look undervalued relative to the company's strong share and management performance.

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