Click to view the earnings moves in FERG
Did Options Markets Overestimate FERG’s Post-Earnings Move?
Ferguson Enterprises (NYSE: FERG) released its quarterly earnings today, delivering a healthy set of numbers—including a 5.1% jump in sales and nearly 24% rise in diluted EPS. Yet, the stock fell 5.3% in the latest session—significantly less than the ±8.1% swing the options market had priced in ahead of earnings. What’s the real story behind FERG’s stock behavior, and could there be opportunity hiding in the data?
Solid Fundamentals Meet an Unexpected Stock Slide
Ferguson’s third quarter capped off with $8.2 billion in sales (+5.1% year-over-year), an improved gross margin (up 60 basis points), and operating profit jumping 15.9%. Non-residential business grew at a double-digit pace, even as residential markets remained soft. Despite this, FERG shares ended the day down 5.3% from their previous price, closing at $231.75 (not official closing price).
Notably, options traders had geared up for much higher volatility: today’s move fell short of the market’s ±8.1% expectation. Last quarter, the stock swung 7.9% on earnings, so this “disappointment” may simply reflect a snap-back from previous big moves or shifting market sentiment.
What Does the Historical Stock Performance Reveal?
For those searching for an edge, it pays to look at how FERG typically reacts on and after earnings days. Let’s break down the data:
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +0.3% | 0.0% | +2.2% | -1.7% | +0.2% |
| % of Moves Up | 50.0% | 41.7% | 50.0% | ||
| % of Moves Down | 50.0% | 58.3% | 50.0% |
Source: Historical Stock Performance Around Earnings
Takeaways? Over the last 12 quarters, FERG has delivered nearly a coin-flip on post-earnings direction, with a modest average move of +0.3%. Despite occasional headline swings, there’s no strong upward or downward bias in immediate post-earnings action. The opening gap is often minimal, but intra-day highs can push up +2.2%—suggesting potential opportunities for active traders.
How Big Are the Swings, Really?
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 6.1% | 4.9% | 2.2% | 1.7% | 1.7% |
| Max Absolute Return | 17.2% | 12.0% | 4.9% | 4.0% | 4.6% |
| Min Absolute Return | 0.1% | 0.7% | 0.7% | 0.2% | 0.2% |
While the average daily swing is about 6.1%, the max observed move hit 17.2%. Clearly, while today’s 5.3% decline is meaningful, it’s not outside FERG’s normal earnings-day range—underscoring the importance of watching how the story unfolds in the days to follow.
After Earnings: Does the Trend Reverse or Continue?
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | +0.4% | +0.5% | -0.4% | +0.7% | +1.5% |
| % of Moves Up | 54.5% | 54.5% | 36.4% | 72.7% | 63.6% |
| % of Moves Down | 45.5% | 45.5% | 63.6% | 27.3% | 36.4% |
Historically, the week after FERG’s earnings often sees a rebound, with a 0.7% average gain and 72.7% of occasions ending positive one week out. The momentum typically holds for up to two weeks after, suggesting today’s pullback may not be the last word.
Option Traders: The Story Behind the Most Actively Traded Contract
Option markets were busy today, with 1,208 contracts traded—well above normal volume. The standout was the following single-leg call:
| Option Contract | 19-Dec-25 270 C |
| Volume | 264 |
| VWAP price | 0.40 |
| Open interest | 717 |
| Yesterday's closing price | 2.70 |
This out-of-the-money call drew heavy attention despite the sharp drop in underlying stock. Are some traders already eyeing a post-earnings bounce—or just taking the other side of the trade?
The Takeaway: A Pullback Within the Normal Range, With a Possible Bounce Ahead
While the headline move (-5.3%) feels big, the numbers suggest FERG’s reaction is very much in line with past behavior around earnings—perhaps even milder than options traders were betting on. With history pointing to modest gains in the following week, investors may want to keep an eye on how the stock trades in coming sessions, especially if today’s negative surprise was an overreaction.
Curious to see more historical trends or test your own thesis? Check out the full historical stock performance around earnings here.
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