Earnings Estimates Rising for Fastenal (FAST): Will It Gain?
Fastenal (FAST) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
The upward trend in estimate revisions for this maker of industrial and construction fasteners reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Fastenal, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The earnings estimate of $0.32 per share for the current quarter represents a change of -11.11% from the number reported a year ago.
Over the last 30 days, seven estimates have moved higher for Fastenal compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 23.92%.
Current-Year Estimate Revisions
The company is expected to earn $1.30 per share for the full year, which represents a change of -5.8% from the prior-year number.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, seven estimates have moved up for Fastenal versus one negative revision. This has pushed the consensus estimate 5.08% higher.
Favorable Zacks Rank
The promising estimate revisions have helped Fastenal earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
While strong estimate revisions for Fastenal have attracted decent investments and pushed the stock 7.5% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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