Fastenal Company FAST is gaining from stronger activity across construction markets, with infrastructure and data center projects emerging as important sources of demand. The company’s construction sales grew approximately 17% in the second quarter of 2026, marking the second consecutive quarter of growth at this pace. Fastenal also saw strong activity in electrical and utility markets.
The company’s exposure to project-driven demand provides an opportunity to build on this momentum. Infrastructure and data center projects can support demand for industrial supplies and create opportunities for the company to deepen customer relationships. Larger customer engagement has also been a common factor behind the strongest areas of demand.
The broader industrial environment provides additional support. U.S. PMI averaged slightly above 53 in the second quarter, up from 52 in the first quarter. Industrial production was also slightly positive year over year in April and May. The company benefited from this gradual improvement in industrial activity, along with new customer wins and higher share of wallet.
Fastenal’s overall daily sales growth further reflects the stronger demand environment. Daily sales increased 14.7% in the second quarter, compared with 12.4% in the first quarter. The company attributed the growth to new customer wins, increased share of wallet, pricing and improved industrial production.
However, the company faces mixed demand across end markets. Fastenal experienced softer trends in markets linked to discretionary consumer spending. A slowdown in broader economic activity could therefore weigh on construction demand.
Infrastructure and data center activity remain important growth areas for the company’s construction business. Sustained project activity in these markets would provide a strong base for Fastenal to maintain its current growth momentum and support overall sales.
How Fastenal Stacks Up Against Peers
Fastenal operates in an industrial distribution market where construction activity, project demand and customer expansion are important growth factors. MSC Industrial Direct Co., Inc. MSM and SiteOne Landscape Supply, Inc. SITE also have exposure to industrial and construction-related demand, although the end-market mix differs across the companies.
MSC Industrial is seeing signs of improvement in the broader industrial market, with positive industrial production readings across most major manufacturing end markets. Average daily sales increased 7.8% year over year in the third quarter of fiscal 2026. MSC Industrial is also expanding its vending and in-plant footprint, with vending machines increasing 7% year over year to approximately 30,800. Sales through vending rose 15%, while sales to customers with in-plant programs increased 16%.
SiteOne has a more direct exposure to construction through new residential and commercial markets. New commercial construction accounts for 14% of sales and has remained solid, although SiteOne expects the market to be flat in 2026. Project services bidding activity was slightly positive year over year, providing an indication of ongoing project demand. However, new residential construction, which represents 20% of sales, is expected to decline at a high-single-digit rate this year.
Fastenal has a stronger growth profile in construction at present, with exposure to infrastructure, data center, electrical and utility projects. This project-driven demand gives the company opportunities to deepen customer relationships and capture additional business from larger projects. If infrastructure and data center activity remains firm, the company could sustain construction momentum and support overall sales growth.
FAST Stock’s Price Performance & Valuation Trend
Shares of this wholesale distributor of industrial and construction supplies have gained 27.5% year to date, outperforming the Zacks Industrial Services industry, the broader Industrial Products sector and the S&P 500 Index.
FAST YTD Share Price Performance
Image Source: Zacks Investment Research
FAST stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 38.14, as shown in the chart below.
FAST P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Earnings Estimate Revision of FAST
FAST’s earnings estimates for 2026 and 2027 have increased over the past 30 days. The estimated figures for 2026 and 2027 imply year-over-year growth of 15.6% and 10.1%, respectively.
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Fastenal currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Fastenal Company (FAST): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).