Assessing Fastenal (FAST) Valuation As Dividend Declaration And January 20 Earnings Update Near
Fastenal (FAST) is back in focus after its board declared a cash dividend of $0.24 per share, as investors watch for the company’s January 20 quarterly earnings update and any fresh read on industrial demand.
See our latest analysis for Fastenal.
Fastenal’s recent cash dividend news and the upcoming January 20 update come as the share price sits at $43.74, with an 8.16% year to date share price return and a 17.43% 1 year total shareholder return, following a multi year total shareholder return that has more than doubled over five years.
If this kind of steady industrial story interests you, it could be a good moment to widen your search with fast growing stocks with high insider ownership for other companies showing strong performance and insider conviction.
With the shares at $43.74 and only a small 1% discount to the US$44 analyst target, the market seems fairly aligned with current expectations. This raises the question of whether there is still a buying opportunity here or if future growth is already priced in.
Most Popular Narrative: 1% Overvalued
Compared with Fastenal’s last close at $43.74, the most followed narrative points to a fair value of about $43.46, putting the shares almost exactly in line with that view but with only a slight premium.
The analysts have a consensus price target of $44.35 for Fastenal based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $53.0, and the most bearish reporting a price target of just $29.5.
Curious how mid single digit revenue growth, firmer margins and a premium P/E all fit together here? The full narrative spells out the earnings path, the implied multiple and the discount rate that have to line up for this price to make sense.
Result: Fair Value of $43.46 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, slowing sales trends and pressure on gross margins could challenge the idea that Fastenal deserves a premium P/E and a steady earnings trajectory.
Find out about the key risks to this Fastenal narrative.
Build Your Own Fastenal Narrative
If you are not fully on board with this view or simply prefer to test the numbers yourself, you can build a custom Fastenal story in just a few minutes. To begin, use Do it your way.
A great starting point for your Fastenal research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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