Ferguson and Tesco share earnings


Ferguson is widely expected to achieve growth in its full-year earnings of up to 14 percent, to $4.39, with revenues expected to be up by around 8 percent to nearly $21 billion.

Strong momentum in the U.S. has driven the firm’s performance, despite the introduction of higher tariffs and inflation pressures that may affect performance in 2019.

Shares are sitting at 15.9 times forward earnings, above the 15.3 average of the previous five years. In the next three years, the estimated earnings growth is predicted to be 13.9 percent compared to an average of 6.7 percent over the previous four years.

Share Price Performance

Ferguson’s share price has been one of the strongest performing in the FTSE 100, with the share performing well ever since the turnaround in 2009.

In the nine years since the share price has increased and is closing in on its highest ever price of £68.70 that was recorded in early 2006.

Any drops in Ferguson share price, such as the recent August dip, have been seized upon by traders so we can expect that any further dips will be bought as long as the share price maintains above £59.00.

Tesco First-Half Figures

Tesco is expected to see a 14 percent reduction in its earnings for the first half of the year to 6.7p per share, while revenue is predicted to grow by 6.4 percent to £30.15 billion.

Tesco has surpassed predictions on earnings in five out of eight of its last reports but has also failed to meet expected revenue in five out of eight of the previous reports.

Shares usually move on average around 6 percent on results day, above the predicted 4.4 percent forecast.

The share price has been struggling with inflation, economic fears over Brexit, and competition. All negatively impacting Tesco sales figures and causing a dip in shares in recent times.

Sales growth persistently underperforms compared to its competition and not just in the discount section of the market with both Asda and Morrisons having shown stronger sales figures than Tesco.

The launch of Tesco budget store Jack’s will have to prove that its sales growth does not come at the expense of established Tesco stores to improve sales figures. Tesco shares sit at 15.2 times forward earnings, beneath the 17.1 average of the last five years.