Loop Capital boosts Mohawk Industries shares target on favorable market outlook By Investing.com

Wednesday – Loop Capital has increased the price target for Mohawk Industries (NYSE:) shares to $145 from the previous target of $135, while retaining a Buy rating on the stock.

The firm’s analyst cited unchanged estimates for the current year, except for adjustments due to currency fluctuations. Mohawk Industries has described the current industry demand as being at the lowest point of the cycle.

Loop Capital expressed a positive outlook for Mohawk’s future, adjusting upward the estimates for margins beginning in the second quarter of 2025 and for sales starting in the fourth quarter of that year.

The firm anticipates a more favorable development in price and product mix than previously expected for 2025, which should enable the company to benefit from restructuring cost improvements.

The firm also noted that its adjusted earnings per share (EPS) estimate for Mohawk Industries in 2024 is $0.30 higher than the consensus. This optimistic stance is in spite of Mohawk’s shares having already seen a significant increase, up 25% year-to-date, which has outperformed the broader market.

Loop Capital’s valuation of Mohawk Industries at 13 times the projected adjusted EPS for 2024 and 7 times the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) reflects what they believe to be an overly negative market sentiment. The firm suggests that these multiples are low considering they are based on what is believed to be the trough, or lowest point, in earnings levels.

InvestingPro Insights

As Loop Capital raises Mohawk Industries’ price target, real-time data and insights from InvestingPro can provide additional context for investors considering the stock. According to recent InvestingPro data, Mohawk Industries boasts a market capitalization of $8.47 billion and a Price to Book ratio for the last twelve months as of Q1 2024 at 1.11, indicating that the stock may be trading at a reasonable valuation relative to its book value. Additionally, the company has experienced a significant return over the last week, with a 17.5% price total return, and is trading near its 52-week high, at 99.8% of this peak.

Two key InvestingPro Tips for Mohawk Industries highlight the company’s potential and current market position. Net income is expected to grow this year, suggesting a positive outlook for profitability. Moreover, analysts predict the company will be profitable this year, aligning with Loop Capital’s optimistic stance on the company’s future earnings. It’s worth noting that Mohawk Industries does not pay a dividend, which may influence the investment strategy for income-focused investors.

For investors seeking a deeper analysis, InvestingPro offers additional tips on Mohawk Industries, which can be accessed through their platform. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 10 more InvestingPro Tips available, providing a comprehensive look at the company’s financial health and market performance.

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