Ferguson issued new guidance for 2021 operating profit 10% ahead of consensus, as a very strong second half is materialising. We raise our 2021 PBT estimate by 12% reflecting new guidance, although the 2022 upgrade is smaller as the outlook out to 2022 may be more nuanced. Ferguson has gained share through industry leading inventory availability and has grown margin by 245bp as inflation has been passed through. We raise our target price to £100 (from £96), continuing to rate the shares Hold, with valuation fully reflecting strong fundamentals, in our view.
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