Zacks Investment Research upgraded shares of Fastenal Company (FAST) from UNDERPERFORM to NEUTRAL on November 07, 2012, with a target price of $45.00.
In line with expectations, Fastenal Company's third quarter 2012 earnings of $0.37 per share grew 12.1% year over year, attributable to 12.2% year over year revenue growth. The daily sales growth rates declined in the second and third quarters due to uncertainty in the growth outlook of Fastenal's end markets. However, daily sales re-accelerated in the month of September, which is an encouraging sign. Fastenal is also seeing some improvement in demand, mainly in the construction market. Moreover, Fastenal is fast accelerating its vending contract signings and installations. We are also encouraged by Fastenal's numerous growth drivers like government business and metalworking, which are gaining traction and will help to achieve future profitability. Other than that, the company's strategy of new store openings builds the infrastructure for future growth. We therefore upgrade our recommendation on Fastenal from Underperform to Neutral.
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