Mohawk Industries Stock Surges on Bank of America Double Upgrade
Shares of Mohawk Industries (MHK) surged Friday after the company reported second-quarter financial results — and got a bullish pat on the back from analysts at Bank of America.
Strong Second-Quarter Results
Mohawk’s stock, which rose nearly 20% on Friday, jumped after the flooring manufacturer reported second-quarter EPS of $2.46 and net sales of $2.8 billion, in line with analysts’ expectations, per Visible Alpha. The company is poised to benefit from a recovery in the global ceramic sector, according to the Bank of America analysts.
Bank of America Upgrade
The shares also got a big upgrade from the Bank of America analysts, who lifted their rating to “buy” from “underperform,” and raised their price target to $177 from $120. That’s a more than 31% premium over the company’s Thursday closing price.
“We are now more confident that margins will continue to improve despite the challenging macro backdrop,” the analysts said. “We expect a recovery in North America and global ceramic segment margins off depressed levels and stabilization in the rest of the world driven by better productivity.”
BofA raised its 2024 earnings per share (EPS) projection to $10.31 from $9.23, well above the Visible Alpha Consensus, and its 2025 EPS projection to $11.95 from $10.90.
Restructuring Initiatives
Mohawk also announced that ongoing restructuring initiatives will generate savings of $100 million per year going forward, and $20 million to $25 million in 2024. That’s on top of $150 million in annualized savings announced in the company’s 2023 annual report, BofA noted.
Impressive Year-to-Date Performance
Mohawk’s shares are up about 55% this year, making it a top performer in the market. The positive second-quarter results and the Bank of America upgrade have further boosted investor confidence in the company’s future prospects.
Conclusion
Mohawk Industries’ strong second-quarter results and the Bank of America double upgrade have propelled its stock to new heights. With a recovery in the global ceramic sector and ongoing restructuring initiatives, the company is well-positioned for continued growth. Investors are optimistic about Mohawk’s future and have responded positively to the news, driving the stock price up by nearly 20%. As the company continues to execute its strategic initiatives and deliver solid financial performance, it is likely to attract more attention from investors and analysts alike.
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