Fastenal (FAST) to Post Q4 Earnings: What Awaits the Stock?
Fastenal Company FAST is scheduled to report fourth-quarter 2021 results on Jan 19, before the opening bell.
In the last reported quarter, earnings and revenues topped the Zacks Consensus Estimate by 2.4% and 1.1% as well as increased 9.7% and 10% from the year-ago figures, respectively. Fastenal’s earnings topped the consensus mark in all the last four quarters, with the average being 2%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been unchanged at 36 cents over the past 60 days. The estimated figure indicates 5.9% growth from the year-ago level. The consensus mark for revenues is pegged at $1.49 billion, suggesting a 9.7% increase from the year-ago reported figure of $1.36 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 year over year in the fourth quarter, given increased manufacturing and non-residential construction demand.
If we go by the latest monthly sales report, November average daily sales or ADS grew 13.2% to $25 million from 14.1% growth registered in October 2021 and 6.8% 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 November and October, manufacturing sales improved 22.6% and 22.9% for the respective months. Non-residential construction grew 16.6% and 14.2% for November and October 2021. Fastener sales were up 23.7% in November (versus a 23.2% increase in October). Safety sales increased 0.4% for November versus 2.9% growth in October. In terms of customer channel, national accounts were up 19% year over year (versus up 18% in October), while non-national accounts grew 6% (versus up 8% in October 2021).
The Zacks Consensus Estimate for the company’s overall daily sales is pegged at $23.5 million, which indicates a sequential decrease from $24.3 million but a year-over-year rise from $21.6 million.
Margins: Inflationary pressures have been a cause of concern. Although Fastener’s first, second and third-quarter performances were impacted by the same, the company highlighted the fact that it has been experiencing significant material cost inflation, particularly for steel, fuel as well as 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 does not conclusively predict 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. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. 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 #2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boise Cascade Company BCC has an Earnings ESP of +3.21% and a Zacks Rank #2.
Shares of Boise Cascade have gained 44.5% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.
United Rentals, Inc. URI has an Earnings ESP of +1.34% and a Zacks Rank #2.
Shares of United Rentals have gained 28.5% over the past year. URI’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 5.7%.
Vulcan Materials Company VMC has an Earnings ESP of +6.01% and a Zacks Rank #2.
Shares of Vulcan Materials have gained 19.4% over the past year. VMC’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 15.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Fastenal Company (FAST) : Free Stock Analysis Report
Vulcan Materials Company (VMC) : Free Stock Analysis Report
United Rentals, Inc. (URI) : Free Stock Analysis Report
Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
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