Analyst Believes Mohawk Stock Fairly Priced

New York, NY, Sept. 16, 2008--Cowen & Co. began coverage on Mohawk Industries with a neutral rating.

Cowen analyst, Laura Champine, says, "Mohawk is a market leader in the U.S. flooring industry that generates significant free cash flow. We believe a bottom to the cycle in the domestic flooring business is not yet in sight, and we do not believe the valuation is attractive enough for investors to be involved.

"We believe when the industry shows some signs of a bottom that MHK will be an early cycle recovery story...We are forecasting operating EPS to decline 31% percent in 2008 to $4.30 vs. $6.27. When the cycle eventually improves, we believe MHK will be able to grow at a consistent rate and expand margins."

Champine said the company's near-term risks include still-significant cost inflation in petroleum-based raw materials and transport costs, a slowdown in its European operations, and continued housing-cycle and credit crunch-related demand weakness in the U.S.