Market Overview

Stifel Upgrades Mohawk Industries, Expects Margins To Improve Through 2019

Stifel Upgrades Mohawk Industries, Expects Margins To Improve Through 2019

Mohawk Industries, Inc. (NYSE: MHK) shares have been under pressure over the past several months due to downward revisions to the company’s outlook.

While the stock reflects the possibility of further downward revisions in the company’s earnings, margins are likely to improve sequentially through 2019, according to Stifel.

The Analyst

John Baugh upgraded Mohawk Industries from Hold to Buy and raised the price target from $135 to $180.

The Thesis

Following the recent pressure, the share price provides an attractive entry point, Baugh said in the Wednesday upgrade note. (See his track record here.) 

The company’s margins seem to have bottomed in the first quarter and could expand through the year, the analyst said.

Inflation, which had adversely impacted margins for many quarters, has recently eased, he said. 

Moreover, major initiatives have been taken by Mohawk Industries to reduce its manufacturing cost, Baugh said. The company has reduced capacity where appropriate, shifting production to luxury vinyl tile and adjusting production in-line with volumes, he said. 

A recent meeting with management revealed that the two luxury vinyl tile plants completed their start-up phase, meaning that both facilities are now operating above breakeven levels, the analyst said.

While efforts were needed to increase throughput and bring margins closer to the targeted levels, there are unlikely to be downside surprises, according to Stifel. 

Price Action

Shares of Mohawk Industries had risen nearly 3 percent to $140.00 at the time of publishing on Thursday morning.

Related Links:

10 Biggest Price Target Changes For Thursday

Benzinga's Top Upgrades, Downgrades For May 16, 2019

Latest Ratings for MHK

Aug 2019UpgradesUnderperformMarket Perform
Jul 2019UpgradesUnderperformNeutral
Jul 2019MaintainsBuy

View More Analyst Ratings for MHK
View the Latest Analyst Ratings

Posted-In: John Baugh StifelAnalyst Color Upgrades Price Target Analyst Ratings


Related Articles (MHK)

View Comments and Join the Discussion!

Latest Ratings

FTVMorgan StanleyMaintains70.0
ROKMorgan StanleyMaintains142.0
WWEFBN SecuritiesUpgrades100.0
SWNCapital One FinancialUpgrades
AEISCowen & Co.Downgrades57.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Supreme Cannabis Acquires Blissco Cannabis In $36.6M Deal

Nvidia Trades Higher After Q1 Earnings Beat, CEO Says It's Back On Upward Trajectory