Fasternal said it earned $131.52 million or $0.45 a share for the second quarter, which was down from $140.36 million, or $0.45 a share, in the year-ago quarter. Street analysts expected the company to report earnings of $0.45 a share.
Following are the sales drivers of Fastenal, according to BMO:
"Management believes it is gaining share through Vending, although existing customers are buying less. Approximately 75 percent of the vending machines installed have been optimized, which is up from 60 percent in 1Q16," analyst Scott Graham wrote in a note.
Rating, Estimates And Justification
However, following lower-than-expected second-quarter results, Graham slashed his 2016 EPS estimate by $0.10 to $1.73, and 2017 EPS view by $0.11 to $1.87. The analyst, who has a Market Perform rating on the stock, also trimmed his price target by $2 to $47.
"FAST is currently trading at 15 percent premiums to the Industrial Distribution stocks. We believe the stock should trade at 25 percent premiums to these peers. In recent years, the historical premium levels have declined to 20–40 percent due to slower sales and earnings growth and an inability to hit its pretax margin goal. We believe this construct should hold at present," Graham added.
Shares of Fastenal closed Wednesday's regular trading session at $43.30.
Did you like this article? Could it have been improved? Please email feedback@benzinga.com to let us know!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.