Fastenal Company Outshines Rivals with Strong Performance Despite Challenges
A Closer Look at Fastenal’s Stock Growth and Future Outlook
With a market cap of $46.9 billion, Winona, Minnesota-based Fastenal Company (FAST) stands out as a top wholesale distributor of industrial and construction supplies, primarily serving the North American market. The company focuses on fasteners and a wide selection of related products for manufacturing, construction, and other industries.
Fastenal’s shares have fared better than the overall market over the last year. Over the past 52 weeks, FAST has climbed 36.2%, while the broader S&P 500 Index ($SPX) has increased by 30.4%. In 2024, FAST’s shares have risen by 26.4%, outpacing the SPX’s gain of 23.1% on a year-to-date basis.
Examining the data further, FAST’s performance shines compared to the Industrial Select Sector SPDR Fund’s (XLI) 32.6% gain over the past year and a 22% return on a year-to-date basis.
Despite reporting lower-than-expected Q3 revenue of $1.9 billion, Fastenal shares surged 9.8% on October 11. This spike was driven by strong sales from larger customers and new Onsite locations. Furthermore, the company’s digital sales rose significantly to 61.1% of total sales, and sales through vending devices and National Account customers continued to grow impressively year-over-year. Encouraging signs of a solid quarter helped ease worries about Hurricane Helene disruptions and margin pressures.
Looking ahead to the current fiscal year, which ends in December, analysts anticipate that FAST’s EPS will increase slightly year-over-year to $2.03. The company’s earnings record has been mixed; it has met or exceeded consensus estimates in three of the last four quarters, missing one time.
Among the 15 analysts tracking the stock, the consensus rating stands at “Hold.” This includes three “Strong Buy” ratings, ten “Holds,” and two “Strong Sells.” The current analyst sentiment is a bit more optimistic than it was three months ago, when there were fewer “Strong Buy” ratings.
On November 13, UBS initiated coverage of Fastenal with a “Neutral” rating and raised its price target to $135, citing potential recovery opportunities as industrial output aligns with normalizing interest rates. The firm pointed out the likelihood of a short-cycle recovery driven by improving economic conditions after the recent U.S. election.
Currently, FAST is trading above the mean price target of $77.17. The highest price target of $88 suggests a potential upside of only 7.5% from the existing price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
