This flooring company has a great track record of beating analysts’ estimates. Fourteen analysts have raised their 2016 forecasts for the company, and 15 for 2017.
Mohawk Industries (MHK)
From Dow Theory Forecasts
Analyst estimates for Mohawk Industries (MHK) have ticked higher in the days since the flooring manufacturer posted strong June quarter results and gave upbeat guidance for the current quarter. Mohawk earned $3.47 per share excluding special items, up 29% and $0.10 above the consensus. Sales climbed 13% to $2.31 billion on growth across all three business segments. Operating profit margin expanded for the 18th straight quarter, a trend management expects to continue.
Mohawk has topped the consensus profit estimate in 17 of the past 18 quarters. Management anticipates September-quarter earnings per share of $3.40 to $3.49, implying 14% to 17% growth. The consensus was $3.37 per share at the time of the announcement.
Mohawk also noted strong booking trends for July and said recent price hikes should help offset currency headwinds. Shares rallied on the results and are now up 12% for the year. The stock still appears reasonably valued at 18 times trailing earnings, 5% below the median S&P 1500 home-furnishing stock and 16% below its own five-year median.
Mohawk is a Focus List Buy and a Long-Term Buy.
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, August 15, 2016