09:19 AM EDT, 09/15/2025 (MT Newswires) -- Ferguson Enterprises ( FERG ) is expected to be impacted by a weak residential heating, ventilation and air conditioning market in the first half of fiscal 2026, as well as face pressure from slowing waterworks, Truist Securities said in a Monday client note.

The brokerage noted concerns about the plumbing and heating products company's fiscal fourth-quarter results due on Tuesday, following recent negative commentary by HVAC supplier Carrier Global ( CARR ) on residential shipments and peer Core & Main's ( CNM ) latest earnings released earlier in the month.

The residential HVAC industry has seen an acceleration in shipment declines following a significant rise in 2024, with manufacturers including Carrier Global ( CARR ) facing weak shipments and inventory reductions, according to the brokerage.

Ferguson didn't see as "strong a run up," with growth being around 12% over the previous four quarters, but Truist expects the company to see pressure over the next several quarters. The brokerage estimates that the HVAC market accounts for about 12% of Ferguson's sales.

Additionally, Core & Main ( CNM ) said it saw weak new residential business in its earnings report last week and warned its results will be pressured, especially in the second half of 2025, according to Truist. The brokerage expects Ferguson to see a similar scenario, although it has been gaining share due to its ability to do work both inside and outside buildings.

Wall Street is estimating about 5% to 6% revenue growth for Ferguson in the first half of fiscal 2026, but Truist doesn't believe the company's guidance will be "that strong" due to doubts about the residential markets. The brokerage projects the weakness related to the residential HVAC market will be cushioned by Ferguson's position as a distributor, while softness in residential waterworks is expected to be "somewhat offset" by cross-sell.

"We believe the growth story at (Ferguson) is excellent long-term and include potential (high-single-digit) organic growth once both the residential and commercial cycle turns," Truist wrote in its note. "We would be aggressive buyers on any weakness."

The brokerage has a buy rating on Ferguson's stock with a price target of $240.