Piper Jaffray Reiterates Its Neutral Rating & $62 PT On Fastenal Company

Fastenal Company FAST reported January average daily sales growth of 18.8%, slightly ahead of its 15% estimate, which likely would have been a bit stronger absent the late January storms that impacted the East Coast. Piper Jaffray continues to believe that Fastenal is set for solid growth in CY11, but sees headwinds from rising raw material costs as well as much more difficult comps, which begin in 2Q, as meaningful challenges for the company. Fastenal has been adding both actual headcount and FTE's for some months and is likely to continue in CY11. Piper would expect that FAST will be able to leverage these new assets to achieve better sales penetration, but if sales were to slow rapidly, adjusting this category could be challenging. January y/y actual headcount is up 12% and FTE's are up 11%. Piper Jaffray has a $62 PT and Neutral rating on FAST FAST is trading higher at $61.06