Fastenal (FAST) PT Lowered to $45 at Wolfe Research

Wolfe Research analyst Ryan Cooke lowered the price target on Fastenal (NASDAQ: FAST) to $45.00 (from $46.00) while maintaining a Underperform rating.

The analyst comments "As highlighted in our pre-call Comments (LINK), FAST was a significant laggard (-7%) following weaker than expected 1Q26 sales (March ADS of 11.5% vs. ~13% bogey) and gross margin (-20bps vs. Street). The basic problem is that pricing actions came in lighter at +3.5% (+20bps Q/Q), which led to a -50bps negative price/ cost gap. Free cash flow was the highlight on solid working capital management viz. inventory. Click HERE for our Abridged Transcript. Why is Fastenal struggling to pass along inflation? First, the tariff and commodity inflation has taken longer to materialize due to slow turns and FIFO inventory cost accounting, and there is still incremental inflation stored up on the balance sheet. But there do appear to be pockets of price fatigue across the non-fastener categories following the large number of supplier increases over the past 12 months. We also think that lagging price actions can also be attributed to FAST’s highly decentralized structure i.e., there is no centralized price push as such. Management is seeking to close the gap by mid-year, but the inflationary pressures appear to be building with fuel surcharges likely a feature from hereon. Bottom line. Our estimates have been trimmed, from $1.23 to $1.22 for FY26E. Our price target is also slightly lower at $45 from $46 prior. FAST currently trades at 36.1x NTM P/E – this compares to its 5Y average of 27.3x. This represents a 62% premium to our distributor comp group vs. the 73% 5Y average. Overall, the valuation remains full."

You May Also Be Interested In

• Bernstein SocGen Group Starts Terawulf Inc. (WULF) at Outperform
• Medtronic, Inc. (MDT) PT Lowered to $101 at Needham
• RBC Capital on Veeva Systems (VEEV) Amid After Hours Selloff on Earnings: 'we are surprised to see shares trade down'