FAST
Fastenal Company
$45.38
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 76.3% above fair value
You pay
$45.38
Bear
$20.60
Fair
$25.75
Bull
$30.90
Bear
$20.60
-54.6%
$1.09 × 12x P/E
Fair
$25.75
-43.3%
$1.09 × 15x P/E
Bull
$30.90
-31.9%
$1.09 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
41.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $47.67 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $25.75 per share.
Warnings
The company pays out 88% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $47.67 (from 31 analysts). Our estimate is 66% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples