Fastenal (FAST) to Post Q1 Earnings: What Awaits the Stock?
Fastenal Company FAST is scheduled to report first-quarter 2022 results on Apr 13, before the opening bell.
In the last reported quarter, earnings and revenues topped the Zacks Consensus Estimate by 8.1% and 1.7% as well as increased 17.6% and 12.8% from the year-ago figures, respectively. Fastenal’s earnings topped the consensus mark in all the last four quarters, with the average being 3.3%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been unchanged at 44 cents over the past 60 days. The estimated figure indicates 18.9% growth from the year-ago level. The consensus mark for revenues is pegged at $1.68 billion, suggesting an 18.4% increase from the year-ago reported figure of $1.42 billion.
Fastenal Company Price and EPS Surprise
Fastenal Company price-eps-surprise | Fastenal Company Quote
Key Factors to Note
Sales: This national wholesale distributor of industrial and construction supplies is likely to have witnessed higher comps on a year-over-year basis in the first quarter, given increased manufacturing and non-residential construction demand.
If we go by the latest monthly sales report, February average daily sales or ADS grew 21.3% to $26.5 million from 14.9% growth registered in January 2022 and 1.5% in the year-ago period. The company has been navigating well through issues like price inflation, supply chain challenges and shortage of labor. It has been gaining from all product categories, end markets and customers.
In terms of end markets/products/customers in February and January, manufacturing sales improved 25.8% and 20.8% from the respective year-ago months. Non-residential construction grew 19.5% and 12.9% for February and January 2022, respectively. Fastener sales were up 28% in February (versus a 20.9% increase in January). Safety sales increased 18.8% in February versus 12.9% growth in January. In terms of customer channel, national accounts were up 26% year over year in February (versus up 19% in January), while non-national accounts grew 16% (versus up 10% in January 2022).
The Zacks Consensus Estimate for the company’s overall daily sales is pegged at $26.7 million, which indicates an increase from $24.7 million sequentially and $22.5 million a year ago.
Margins: Inflationary pressures have been a cause of concern. The company highlighted the fact that it has been experiencing significant material cost inflation, particularly for steel, fuel and transportation. The company has been experiencing the adverse effects of tightening global and domestic supply chains.
Yet, Fastenal has been successfully raising prices to offset inflationary pressures. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, which are expected to reflect on the bottom line.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Fastenal this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is absolutely the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +2.94%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Fastenal carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combination
Here are some other companies, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Owens Corning OC has an Earnings ESP of +0.54% and a Zacks Rank #2.
OC’s earnings topped the consensus mark in all the last four quarters, with the average being 15.5%. Earnings for the to-be-reported quarter are expected to grow 40.5% year over year.
Summit Materials, Inc. SUM has an Earnings ESP of +5.26% and a Zacks Rank #2.
SUM’s earnings topped the consensus mark thrice but missed the same on the other occasion, with the average surprise being 7.5%. Earnings for the to-be-reported quarter are expected to decline 15.2% year over year.
KBR, Inc. KBR has an Earnings ESP of +7.64% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%. Earnings for the to-be-reported quarter are expected to grow 20.8% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fastenal Company (FAST) : Free Stock Analysis Report
KBR, Inc. (KBR) : Free Stock Analysis Report
Owens Corning Inc (OC) : Free Stock Analysis Report
Summit Materials, Inc. (SUM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
