Analyst Lowers Estimates on Public Flooring Firms

New York, NY, Sept. 15, 2011 -- Flooring industry analyst Stifel-Nicolaus has lowered its estimates for all public flooring companies it covers in light of the weak housing market, especially the homebuilding sector.

"Investors waiting for a housing recovery to help flooring sales will have to continue to wait," the firm said.

The firm said even if the housing market begins to turn around, it is unlikely to help flooring sales in the "near-to-intermediate term."

Stifel noted that residential replacement, which represents about half of flooring demand, is still sluggish, home prices are declining, consumer sentiment is poor, and raw material prices are rising.

"The residential replacement business is likely not going to be a near term catalyst," the firm said.

Commercial flooring remains a relative bright spot, Stifel said, "but the prospects for 2012 for this segment are murky at best," citing a weak financial sector and the prospects of further cuts in government spending.

The firm is maintaining "buy" ratings on Armstrong and Lumber Liquidators, and "hold" ratings on Mohawk and Interface. It did not cover the Dixie Group.

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