Mohawk stock price target cut to $135 by Jefferies

On Tuesday, Jefferies analyst Philip Ng adjusted the price target for Mohawk Industries (NYSE: NYSE:MHK), a leading flooring manufacturer, reducing it to $135 from the previous $145 while maintaining a Hold rating on the stock. According to InvestingPro data, analyst targets for MHK range from $125 to $165, with the stock currently appearing undervalued based on comprehensive Fair Value analysis. Ng noted that demand for the company’s products seems to have stabilized, with a roughly 3% year-over-year increase in volumes for the fourth quarter of 2024. This increase was essentially flat when accounting for calendar and currency adjustments. The company maintains a strong financial position with a healthy current ratio of 2.06 and operates with moderate debt levels, as revealed by InvestingPro’s financial health analysis.

The strongest performance was seen in Flooring North America, which benefited from Mohawk’s introduction of new products and the expansion of distribution partnerships. Excluding the impact of two additional business days, Ceramic volumes remained approximately flat, whereas Flooring Rest of World (ROW) continued to experience negative volumes.

Looking ahead to 2025, Jefferies is forecasting relatively unchanged volumes for Mohawk Industries, with a weaker first half and a modest improvement in the second half of the year. Ng pointed out that with mortgage rates hovering around 7% and the flooring industry’s delayed response to changes in housing demand, a significant uptick in demand may not occur until late 2025 or possibly even early 2026.

Mohawk’s investments and strategic partnerships have helped to sustain its market position despite a challenging economic environment characterized by high mortgage rates and a sluggish housing sector. The company’s ability to maintain flat volumes in a difficult market underscores its resilience and the effectiveness of its business strategies. Trading at a P/E ratio of 14.4 and maintaining profitability with an EBITDA of $1.3 billion, Mohawk demonstrates fundamental strength. For deeper insights into Mohawk’s financial health and growth potential, including additional ProTips and comprehensive analysis, explore the full research report available on InvestingPro.

In other recent news, Mohawk Industries has been the focus of several analyst adjustments. Truist Securities reduced their price target for Mohawk Industries from $155.00 to $148.00, maintaining a Buy rating, following the company’s sales and earnings per share (EPS) figures that exceeded expectations. Truist Securities also expressed cautious optimism about the potential for a rebound in industry demand.

UBS, on the other hand, maintained a Neutral rating but lowered the price target from $132.00 to $128.00. The adjustment came after revising their adjusted EBITDA estimates downward for the years 2025 through 2027. UBS analysts noted the discretionary nature of Mohawk Industries’ flooring products and the potential impact of interest rates on flooring demand.

JPMorgan reduced its price target to $156 from $161 but kept an Overweight rating, citing the company’s attractive valuation and strong balance sheet. Loop Capital also adjusted its financial outlook for Mohawk Industries, reducing the price target to $155 from $180, while sustaining a positive Buy rating. The revision was due to complications with their SAP implementation, which is expected to dampen EPS growth throughout 2025.

Lastly, Raymond (NSE:RYMD) James revised the price target for Mohawk Industries to $165 from $185, while reaffirming a Strong Buy rating. The adjustment was in response to anticipated margin pressures, but the firm still expects the company to maintain positive EPS and free cash flow. These are the latest developments in the financial outlook for Mohawk Industries.

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