MHK - Embedded Expectations Analysis - 2020 01 02
Mohawk Industries, Inc. (MHK:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 19.0x Uniform P/E, suggesting somewhat bearish expectations for the firm. Moreover, management may be concerned about operating income, market conditions, and volumes.Specifically, management is confident sales and marketing costs increased by $8mn while price/mix fell by $2mn, and they may lack confidence in their ability to continue adapting to increasingly difficult market conditions. Furthermore, management may be concerned about their ability to continue growing the LVT business and about overall slowdowns in the European economy. Additionally, they appear concerned about the sustainability of recent sales growth rates and about continued headwinds to operating income. Finally, they may be concerned about ongoing volume headwinds in their North American Flooring business and about their ability to manage their SG&A spending.
Mohawk Industries is a global flooring manufacturer for residential and commercial spaces around the world. The company has three segments: Global Ceramic, which designs, manufactures, sources, distributes and markets a line of ceramic, porcelain and natural stone tile products used for floor and wall applications; Flooring North America, which designs, manufactures, sources and distributes broadloom carpet, carpet tile, rugs and mats, carpet pad, laminate, medium-density fiberboard, luxury vinyl tile (LVT) and sheet vinyl; and Flooring Rest of the World, which designs, manufactures, sources and distributes laminate, LVT and sheet vinyl, wood flooring, broadloom carpet and carpet tile collections.
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