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Here's Why You Should Add Mohawk (MHK) to Your Portfolio Now
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Mohawk Industries, Inc. (MHK - Free Report) has been benefiting from solid accretive acquisitions and strategic initiatives. Also, a strong global presence adds to the uptrend.
Shares of MHK gained 6.8% in a month, in line with the Zacks Textile - Home Furnishing industry. Favorable pricing and product mix bode well for the company.
Mohawk delivered a trailing four-quarter earnings surprise of 10.1%, on average. Earnings estimates for 2023 have moved north from $9.40 per share to $9.48 per share over the past 60 days. This depicts analysts' optimism about the company’s growth prospects.
Image Source: Zacks Investment Research
Let us delve deeper into the factors.
Factors Driving Growth
Mohawk is one of the largest flooring manufacturers in the global market and holds a dominant market share in an extremely fragmented and competitive industry. The company consistently makes higher internal investments to boost capacity and enter new markets. Moreover, it selectively invested in greenfield projects and acquisitions (primarily in new product categories and geographies), cost-saving initiatives, as well as share buyback to enhance long-term performance. The company is increasing utilization of new investments in the United States, Europe, Russia, Brazil and Mexico through more product offerings, expansion of customer base and increase in production.
MHK has been gaining immensely through its robust acquisition strategies. The buyouts are aiding the company in widening its product portfolio along with expanding its geographic footprint and market share. In first-quarter 2023, the company completed the acquisitions of two ceramic tile businesses in Brazil and Mexico within Global Ceramic. It is now focusing on integrating these acquisitions along with other sales, marketing and operational plans to improve its business efficiencies. In 2023, the company expects to convert its acquisitions into information systems which will enable it to operate as a single business and enhance efficiencies.
The company has been undertaking various strategic initiatives to improve profitability, given the uncertain macroeconomic environment. The most significant of these initiatives are aligning ceramic production with demand in the United States, realigning its North American carpet operations, optimizing LVT manufacturing and ramping up new plants. In addition, it has been focusing on new product categories, introducing innovative product extensions and optimizing recent buyouts. In addition, the company is streamlining its operations to enhance efficiencies and leveraging automation and process enhancements to lower costs.
Caesars Entertainment presently carries a Zacks Rank #2 (Buy). CZR has a trailing four-quarter earnings surprise of 28.2%, on average. The stock has gained 18.2% in the year-to-date period.
The Zacks Consensus Estimate for CZR’s 2023 sales and earnings per share (EPS) indicates a rise of 7.1% and 108.9%, respectively, from the year-ago period’s levels.
Choice Hotels currently carries a Zacks Rank of 2. CHH delivered a trailing four-quarter earnings surprise of 1.7%, on average. Shares of the company have increased 4.6% in the year-to-date period.
The consensus estimate for CHH’s 2023 sales and EPS indicates a rise of 10.5% and 13.3%, respectively, from the year-ago period’s levels.
Marriott currently carries a Zacks Rank of 2. MAR has a trailing four-quarter earnings surprise of 8%, on average. Shares of the company have increased 24.7% in the year-to-date period.
The Zacks Consensus Estimate for MAR’s 2023 sales and EPS indicates a rise of 13.1% and 25.7%, respectively, from the year-ago period’s levels.
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Here's Why You Should Add Mohawk (MHK) to Your Portfolio Now
Mohawk Industries, Inc. (MHK - Free Report) has been benefiting from solid accretive acquisitions and strategic initiatives. Also, a strong global presence adds to the uptrend.
Shares of MHK gained 6.8% in a month, in line with the Zacks Textile - Home Furnishing industry. Favorable pricing and product mix bode well for the company.
Mohawk delivered a trailing four-quarter earnings surprise of 10.1%, on average. Earnings estimates for 2023 have moved north from $9.40 per share to $9.48 per share over the past 60 days. This depicts analysts' optimism about the company’s growth prospects.
Image Source: Zacks Investment Research
Let us delve deeper into the factors.
Factors Driving Growth
Mohawk is one of the largest flooring manufacturers in the global market and holds a dominant market share in an extremely fragmented and competitive industry. The company consistently makes higher internal investments to boost capacity and enter new markets. Moreover, it selectively invested in greenfield projects and acquisitions (primarily in new product categories and geographies), cost-saving initiatives, as well as share buyback to enhance long-term performance. The company is increasing utilization of new investments in the United States, Europe, Russia, Brazil and Mexico through more product offerings, expansion of customer base and increase in production.
MHK has been gaining immensely through its robust acquisition strategies. The buyouts are aiding the company in widening its product portfolio along with expanding its geographic footprint and market share. In first-quarter 2023, the company completed the acquisitions of two ceramic tile businesses in Brazil and Mexico within Global Ceramic. It is now focusing on integrating these acquisitions along with other sales, marketing and operational plans to improve its business efficiencies. In 2023, the company expects to convert its acquisitions into information systems which will enable it to operate as a single business and enhance efficiencies.
The company has been undertaking various strategic initiatives to improve profitability, given the uncertain macroeconomic environment. The most significant of these initiatives are aligning ceramic production with demand in the United States, realigning its North American carpet operations, optimizing LVT manufacturing and ramping up new plants. In addition, it has been focusing on new product categories, introducing innovative product extensions and optimizing recent buyouts. In addition, the company is streamlining its operations to enhance efficiencies and leveraging automation and process enhancements to lower costs.
Zacks Rank & Other Key Picks
Mohawk currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks from the Consumer Discretionary sector are Caesars Entertainment, Inc. (CZR - Free Report) , Choice Hotels International, Inc. (CHH - Free Report) and Marriott International, Inc. (MAR - Free Report) .
Caesars Entertainment presently carries a Zacks Rank #2 (Buy). CZR has a trailing four-quarter earnings surprise of 28.2%, on average. The stock has gained 18.2% in the year-to-date period.
The Zacks Consensus Estimate for CZR’s 2023 sales and earnings per share (EPS) indicates a rise of 7.1% and 108.9%, respectively, from the year-ago period’s levels.
Choice Hotels currently carries a Zacks Rank of 2. CHH delivered a trailing four-quarter earnings surprise of 1.7%, on average. Shares of the company have increased 4.6% in the year-to-date period.
The consensus estimate for CHH’s 2023 sales and EPS indicates a rise of 10.5% and 13.3%, respectively, from the year-ago period’s levels.
Marriott currently carries a Zacks Rank of 2. MAR has a trailing four-quarter earnings surprise of 8%, on average. Shares of the company have increased 24.7% in the year-to-date period.
The Zacks Consensus Estimate for MAR’s 2023 sales and EPS indicates a rise of 13.1% and 25.7%, respectively, from the year-ago period’s levels.