Ferguson Enterprises' (FERG) acquisition of valve and flow-control distributor FloWorks expands the company's addressable market into a high-margin, less cyclical segment, while its history of successful cross-selling suggests revenue synergies could ultimately exceed initial targets, Truist said in a note Monday.

The investment firm said the deal gives Ferguson another avenue for market share gains, building on its track record of cross-selling plumbing, HVAC, and construction-related products.

The deal expands Ferguson's total addressable market into higher-margin products and projects and the purchase price compares favorably with Ferguson's current trading multiple, according to the note.

Truist reiterated its buy rating with a $300 price target.

Shares of Ferguson were up 2.3% in Monday afternoon trading.

Price: 232.77, Change: +5.31, Percent Change: +2.33