Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - Bernstein SocGen Group initiated coverage on Fastenal (NASDAQ:FAST) with an Underperform rating and a $38.00 price target, aligning with InvestingPro data indicating the stock is currently trading above its Fair Value.
The research firm acknowledged Fastenal as a "quality compounder with a great management team and culture" and expects sales and earnings growth to continue long-term.
Despite the positive long-term outlook, Bernstein expressed near-term pessimism, noting that Fastenal stock has risen 15% year-to-date while its closest competitor Grainger (GWW) has declined 8%, resulting in an "expensive relative valuation." InvestingPro data supports this view, showing Fastenal trading at a P/E ratio of 38.6 and a high PEG ratio of 6.1, suggesting the stock is priced at a premium relative to earnings growth.
The firm highlighted several recent changes at Fastenal, including a new Chief Sales Officer, new CFO, tariffs, and an Investor Day in March that altered some financial disclosures, suggesting that "an improvement in the core business is far from certain." This uncertainty is reflected in InvestingPro data showing 11 analysts have recently revised their earnings downwards for the upcoming period.
Bernstein attributed Fastenal’s recent growth acceleration primarily to "tariff driven sales growth" rather than fundamental business improvements, and projected that pricing would drive "low-to-mid teens sales growth over the coming quarters," compared to the 2-4% growth seen in the previous two years. For investors seeking deeper insights, InvestingPro offers comprehensive research reports on Fastenal and 1,400+ other US equities, transforming complex data into actionable intelligence.
In other recent news, Fastenal Company reported its third-quarter earnings for 2025, missing earnings per share (EPS) expectations. The company posted an EPS of $0.29, slightly below the forecasted $0.30, resulting in a 3.33% negative surprise. However, Fastenal’s revenue met expectations, reaching $2.13 billion, which represents an 11.7% increase compared to the previous year. Additionally, Fastenal announced the appointment of Max Tunnicliff as Chief Financial Officer and Senior Executive Vice President, effective November 10, 2025. In his new role, Tunnicliff will oversee the company’s finance, accounting, audit, and general counsel functions. These recent developments reflect ongoing changes within the company.
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