/Mohawk%20Industries%2C%20Inc_%20logo%20on%20phone%20by-%20viewimage%20via%20Shutterstock.jpg)
Mohawk Industries, Inc. (MHK), headquartered in Calhoun, Georgia, designs, manufactures, sources, distributes, and markets flooring products for residential and commercial applications and new construction markets. Valued at $7.5 billion by market cap, the company offers a broad range of products, including ceramic and porcelain tiles, natural stone, carpets, rugs, laminate, luxury vinyl tile, sheet vinyl, wood flooring, and countertops.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and MHK definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the furnishings, fixtures & appliances industry. MHK's diversified flooring products and global presence mitigate business risk and capitalize on growth opportunities. With a century-long reputation for quality and reliability, MHK continues to innovate through R&D investments and strategic acquisitions, expanding its market reach and offerings.
Despite its notable strength, MHK slipped 27.8% from its 52-week high of $164.29, achieved on Oct. 21. Over the past three months, MHK stock fell 26.2%, underperforming the Invesco Building & Construction ETF’s (PKB) 4.5% losses during the same time frame.
In the longer term, shares of MHK rose 4.4% over the past six months and climbed 14.5% over the past 52 weeks, underperforming PKB’s six-month gains of 12% and 20.3% returns over the last year.
MHK has been trading below its 50-day moving average since late October. The stock is trading below its 200-day moving average since early December.
MHK’s underperformance can be due to declining consumer confidence, persistent inflation, softening residential and commercial market, and the impact of recent hurricanes in the U.S. Additionally, higher interest rates and consumers' deferral of home remodeling and improvement projects have impacted MHK’s performance.
On Oct. 24, MHK reported its Q3 results, and its shares closed down more than 13% in the following trading session. The company’s revenue of $2.72 billion, beat Wall Street forecasts of $2.71 billion. Its adjusted EPS was $2.90, surpassing analyst estimates of $2.89.
MHK’s rival, Leggett & Platt, Incorporated (LEG) lagged behind the stock, declining 17.1% over the past six months and 63.7% over the past 52 weeks.
Wall Street analysts are moderately bullish on MHK’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it, and the mean price target of $157.69 suggests a potential upside of 33% from current price levels.
