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With a market cap of $7.4 billion, Mohawk Industries, Inc. (MHK) is a global leader in flooring manufacturing, offering products such as carpet, rugs, ceramic tile, laminate, wood, stone, and vinyl for residential and commercial spaces. With operations across North America, Europe, Latin America, and beyond, the company sells its products through various channels, including retailers, distributors, home centers, and commercial contractors.
Shares of the flooring maker have underperformed the broader market over the past 52 weeks. MHK has risen 3.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 17.7%. Moreover, shares of MHK are down marginally on a YTD basis, compared to SPX’s 1.5% gain.
Focusing more closely, the Calhoun, Georgia-based company has lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 19.8% return over the past 52 weeks.
Despite Mohawk Industries exceeding Q4 expectations with adjusted EPS of $1.95 and revenue of $2.6 billion on Feb. 6, its stock declined 1.3% the next day. The company provided weak Q1 2025 guidance, projecting adjusted EPS between $1.34 and $1.44, impacted by a $0.35 hit from order management system issues in the Flooring North America segment. Additionally, management highlighted ongoing macroeconomic challenges, such as suppressed home sales, high interest rates, and weak remodeling demand, which contributed to a 2.7% decline in full-year 2024 net sales to $10.8 billion.
Rising material and labor costs, combined with competitive pricing pressures, also raised concerns about future margin compression, despite restructuring efforts aimed at generating $285 million in annualized savings by 2026.
For the current fiscal year, ending in December 2025, analysts expect MHK’s EPS to grow over 1% year-over-year to $12.48. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings and six “Holds.”
This configuration is more bullish than three months ago, with six “Strong Buy” ratings on the stock.
On Feb. 10, Barclays analyst Matthew Bouley reiterated a “Hold" rating on Mohawk Industries and assigned a price target of $125.
As of writing, MHK is trading below the mean price target of $143.78. The Street-high price target of $165 implies a potential upside of 39% from the current price levels.
