Fastenal Stock Outlook: Is Wall Street Bullish or…

Fastenal Stock Outlook: Is Wall Street Bullish or Bearish?

With a market cap of $46.9 billion, Winona, Minnesota-based Fastenal Company (FAST) is a leading wholesale distributor of industrial and construction supplies, operating primarily in North America. The company specializes in fasteners and an extensive range of related products catering to manufacturing, construction, and various other markets.

Shares of the industrial and construction fasteners maker have outperformed the broader market over the past 52 weeks. FAST has climbed 36.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 30.4%. In 2024, shares of FAST are up 26.4%, compared to SPX’s 23.1% gain on a YTD basis.

Zooming in further, FAST’s outperformance becomes more evident when compared to the Industrial Select Sector SPDR Fund’s (XLI) 32.6% gain over the past 52 weeks and 22% return on a YTD basis.

Despite reporting weaker-than-expected Q3 revenue of $1.9 billion, Fastenal shares surged 9.8% on Oct. 11 due to strong sales growth from larger customers and new Onsite locations. Additionally, the digital footprint expanded significantly to 61.1% of sales, and daily sales through vending devices and National Account customers showed solid year-over-year growth. Additionally, positive signals about a stronger finish to the quarter helped offset concerns over disruptions from Hurricane Helene and margin pressures.

For the current fiscal year, ending in December, analysts expect FAST’s EPS to grow marginally year-over-year to $2.03. The company’s earnings surprise history is mixed. It beat or met the consensus estimates in three of the last four quarters while missing on another occasion.

Among the 15 analysts covering the stock, the consensus rating is a “Hold.” That’s based on three “Strong Buy” ratings, 10 “Holds,” and two “Strong Sells.”

This configuration is slightly more bullish than three months ago, with two “Strong Buy” ratings on the stock.

On Nov. 13, UBS initiated coverage of Fastenal with a “Neutral" rating and raised its price target to $135, citing potential recovery opportunities as industrial output shows an inverse relationship with normalizing interest rates. The firm also highlighted the possibility of a short-cycle recovery driven by improved economic conditions following the recent U.S. election.

As of writing, FAST is trading above the mean price target of $77.17. The Street-high price target of $88, implies a potential upside of only 7.5% from the current price.

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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.

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