DA Davidson Reiterates Neutral Rating on Fastenal (FAST), Says Would Buy on 'Any Meaningful Retrenchment'

DA Davidson analyst Chris Dankert reiterated a Neutral rating and $46.00 price target on Fastenal (NASDAQ: FAST).

The analyst commented, "Our checks provide a modestly positive read for FAST as underlying demand continues to tick higher. We continue to forecast Fastenal ADS growth of +12.3% y/y for June, slightly below typical seasonality due to the impact of selling days, but still +22% on a 2-year stack basis (vs. T3M average of 22%). However, we see current consensus earnings forecasts as slightly too high due to near-term margin challenges. Specifically, due to lingering price/ cost headwinds, company commentary suggests CY2Q gross margin will follow typical seasonality (-20bp q/q or tacit guidance for GM of 44.4%; -90bp y/y) despite the impact of incremental pricing gains. Meanwhile, current consensus calls for CY2Q gross margin of 44.6%, flat sequentially. Furthermore, given the need to invest for growth and the impact of rising fuel costs, we believe current consensus is under-appreciating the upward pressure on SG&A. We anticipate 2Q26 SG&A growth of +9.5% y/y (see accompanying table) led by fuel costs (+47% y/y) and modestly higher labor cost expectations (+3% FTE). As a result, we are forecasting 2Q26 EBIT margin of 21.0%, flat y/y and vs. 21.2% consensus. FAST is a high-quality name, and we would be buyers on any meaningful retrenchment."

For an analyst ratings summary and ratings history on Fastenal click here. For more ratings news on Fastenal click here.

Shares of Fastenal closed at $48.31 yesterday.

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