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Topeka Capital Rated Mohawk Industries as ‘Hold’


Nov. 20 2020, Updated 4:48 p.m. ET

Price movement

Mohawk Industries (MHK) has a market cap of $14.4 billion. It rose by 2.3% to close at $196.83 per share on May 24, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.7%, -0.37%, and 3.9%, respectively, on the same day.

This means that MHK is trading 1.1% above its 20-day moving average, 2.0% above its 50-day moving average, and 4.5% above its 200-day moving average.

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Related ETF and peers

The Vanguard Large-Cap ETF (VV) invests 0.06% of its holdings in Mohawk Industries. The ETF tracks a market-cap-weighted index that covers 85% of the market capitalization of the US equity market. The YTD price movement of VV was 2.2% on May 24, 2016.

The market caps of Mohawk Industries’s competitors are as follows:

  • Armstrong World Industries (AWI) — $2.2 billion
  • James Hardie Industries -ADR (JHX) — $6.6 billion
  • Berkshire Hathaway (BRK.A) — $351.5 billion

Topeka Capital rated Mohawk

Topeka Capital has initiated the coverage of Mohawk Industries with a “hold” rating. It also set the stock price target at $185.00 per share.

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Performance of Mohawk Industries in fiscal 1Q16

Mohawk Industries (MHK) reported fiscal 1Q16 net sales of ~$2.2 billion, a rise of 15.5% compared to net sales of ~$1.9 billion in fiscal 1Q15. Sales from the Global Ceramic, Flooring NA, and Flooring ROW segments rose by 7.5%, 7.0%, and 56.3%, respectively, in fiscal 1Q16 compared to fiscal 1Q15. The company’s cost of sales as a percentage of net sales fell by 3.0% in fiscal 1Q16 compared to fiscal 1Q15.

The company’s net income and EPS (earnings per share) rose to $171.5 million and $2.30, respectively, in fiscal 1Q16, compared to $22.3 million and $0.30, respectively, in fiscal 1Q15. It reported adjusted EPS of $2.38 in fiscal 1Q16, a rise of 40% compared to fiscal 1Q15.

Mohawk’s cash and cash equivalents fell by 8.1%, and its inventories rose by 9.7% in fiscal 1Q16 compared to fiscal 1Q15. Its current ratio fell to 1.04x, and its debt-to-equity ratio rose to 0.99x in fiscal 1Q16 compared to a current ratio and a debt-to-equity ratio of 1.06x and 0.96x, respectively, in fiscal 1Q15.

The company has projected EPS in the range of $3.29–$3.38 per share, which excludes any restructuring charges, for fiscal 2Q16.

For ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.


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