Mohawk (MHK) Get Upgrade and Higher Price Target

NEW YORK (TheStreet) -- JPMorgan upgraded Mohawk (MHK) to "overweight" from "neutral" Monday, setting a price target of $170.

Mohawk gained 1.8% to $143.86 in morning trading.

Analyst Michael Rehaut wrote, "While we are certainly 'late to the party' in this name -- up 65% in 2013 vs. our largercap building products universe up 25% (S&P: +30%) -- at the same time, we believe further solid upside exists due to several factors."

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Separately, TheStreet Ratings team rates MOHAWK INDUSTRIES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOHAWK INDUSTRIES INC (MHK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MHK's revenue growth has slightly outpaced the industry average of 29.8%. Since the same quarter one year prior, revenues rose by 33.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MOHAWK INDUSTRIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOHAWK INDUSTRIES INC increased its bottom line by earning $3.60 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($6.49 versus $3.60).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Household Durables industry average. The net income increased by 69.4% when compared to the same quarter one year prior, rising from $70.30 million to $119.07 million.
  • Powered by its strong earnings growth of 62.37% and other important driving factors, this stock has surged by 49.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • Net operating cash flow has slightly increased to $213.06 million or 4.97% when compared to the same quarter last year. Despite an increase in cash flow of 4.97%, MOHAWK INDUSTRIES INC is still growing at a significantly lower rate than the industry average of 72.06%.

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