Analyst Note| Dawit Woldemariam |
Fastenal reported solid first-quarter earnings, which led us to raise our fair value estimate to $44.50 from $43. End market demand continues to strengthen despite supply chain and labor challenges. In the quarter, net sales increased 20% year over year, thanks to strong pricing (up approximately 6% year over year). While supply headwinds still persist, management highlighted the environment is starting to stabilize. Since the onset of the supply crunch, Fastenal has taken pricing actions to address higher manufacturing, fuel, and shipping costs.