Reassessing The Changing Outlook For Mohawk Industries Inc. (MHK)

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    Boston Partners Global Investors,… recently announced the acquisition of new stake in Mohawk Industries Inc. (NYSE:MHK). The institutional investor has increased its shareholding in the Consumer Cyclical company by 21.86% to 3.71 million shares with purchase of 0.67 million shares. This fresh investment now brings its stake to 5.18% valued currently at $346.23 million. In addition, Pzena Investment Management LLC raised its holdings by 36821.0 to 2.07 million shares. And Wells Capital Management, Inc. has lifted its position by 13.41% or 0.19 million shares – to 1.58 million shares.

    With over 0.92 million Mohawk Industries Inc. (MHK) shares trading Monday and a closing price of $103.26 on the day, the dollar volume was approximately $94.58 million. The shares have shown a positive weekly performance of 7.89% and its price on 07/06/20 gained nearly 4.08%. Currently, there are 71.55M common shares owned by the public and among those 58.16M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 18 analysts who have offered their price forecasts for MHK have a consensus price objective of $96.56. The analysts have set the share’s price value over the next 12 months at a high of $120.00 and a low of $62.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Mohawk Industries Inc. stock is 2.80 for the next 12 months. The average price target is -6.02% below its last price level and a downside to the estimated low will see the stock lose -66.55% over that period. But an upside of 13.95% will see the stock hit the forecast high price target while mean target price for the stock is $97.50.

    Insiders at the company have transacted a total of 49 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 23 of these insider trades were purchases, accounting for 318,142 shares. Insider sales of the common stock occurred on 26 occasions, with total insider shares sold totaling 71,248 shares.

    The top 3 mutual fund holders in Mohawk Industries Inc. are Vanguard Total Stock Market Index, Vanguard Mid Cap Index Fund, and JPMorgan Mid Cap Value Fund. Vanguard Total Stock Market Index owns 1.66 million shares of the company’s stock, all valued at over $154.64 million. The company sold 1085.0 shares recently to bring their total holdings to about 2.32% of the shares outstanding. Vanguard Mid Cap Index Fund bought 9804.0 shares to see its total holdings expand to 1.5 million shares valued at over $139.37 million and representing 2.09% of the shares outstanding. JPMorgan Mid Cap Value Fund has total holdings to over 1.23 million shares at a value of $114.51 million. JPMorgan Mid Cap Value Fund now owns shares totaling to 1.71% of the shares outstanding.

    Shares of Mohawk Industries Inc. (NYSE: MHK) opened at $101.65, up $2.44 from a prior closing price of $99.21. However, the script later closed the day at $103.26, up 4.08%. The company’s stock has a 5-day price change of 7.89% and 66.52% over the past three months. MHK shares are trading -24.29% year to date (YTD), with the 12-month market performance down to -31.80% lower. It has a 12-month low price of $56.62 and touched a high of $156.60 over the same period. Currently, 0.92 million shares have been traded, compared to an average intraday trading volume of 855.63K shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 3.06%, 12.41%, and -9.79% respectively.

    Institutional ownership of Mohawk Industries Inc. (NYSE: MHK) shares accounts for 82.60% of the company’s 71.55M shares outstanding. Mutual fund holders own 30.57%, while other institutional holders and individual stakeholders account for 47.66% and 20.06% respectively.

    It has a market capitalization of $7.27B and a beta (3y monthly) value of 1.54. The stock’s trailing 12-month PE ratio is 10.14, while the earnings-per-share (ttm) stands at $10.19. The company has a Quick Ratio of 0.80 with the debt-to-equity ratio at 0.35. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.62% over the week and 5.41% over the month.

    Analysts forecast that Mohawk Industries Inc. (MHK) will achieve an EPS of -$0.46 for the current quarter, $0.85 for the next quarter and $6.7 for 2021. The lowest estimate earnings-per-share for the quarter is -$1.16 while analysts give the company a high EPS estimate of -$0.11. Comparatively, EPS for the current quarter was $2.89 a year ago. Earnings per share for the fiscal year are expected to decrease by -13.10%, and 85.17% over the next financial year. EPS should shrink at an annualized rate of -14.11% over the next five years, compared to 7.30% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 18 brokerage firm advisors rate Mohawk Industries Inc. (MHK) as a “Moderate Buy” at a consensus score of 2.80. Specifically, 6 Wall Street analysts polled rate the stock as a buy, while 6 of the 18 advise that investors “hold,” and 4 rated it as a “Sell.”

    Looking at the support for the MHK, a number of firms have released research notes about the stock. Deutsche Bank stated their Sell rating for the stock in a research note on June 23, 2020, with the firm’s price target at $77. Credit Suisse coverage for the Mohawk Industries Inc. (MHK) stock in a research note released on May 28, 2020 offered a Underperform rating with a price target of $62. RBC Capital Mkts was of a view on May 06, 2020 that the stock is Underperform, while Robert W. Baird gave the stock Neutral rating on April 16, 2020 $86. RBC Capital Mkts on their part issued Sector Perform rating on April 07, 2020.

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