Wunderlich Securities: Fastenal's Earnings Preview

In a research report published this morning by Wunderlich Securities, Fastenal Company

has released its second quarter earnings preview. According to Wunderlich Securities, "Lower operating expense is the primary driver of our projected penny upside, as we believe reduced variable compensation growth and decelerating headcount supports a lower payroll gain than Street assumptions. Further, June daily sales (Wunderlich: 15.1%) may provide perceptions of stabilization/improvement given fewer selling days yearto-year and easier sequential comps. While valuation is expensive versus peers, current levels are in-line with Fastenal's multiple history; recent macro weakness has been incorporated into Fastenal projections, yet may not be reflected in assumptions for other distributors." Wunderlich Securities maintains its Buy rating and $48 PT on Fastenal, which closed yesterday at $41.29.