Analyst Stifel Long-Term Bullish on Mohawk

New York, NY, March 17, 2010--Analyst Stifel Nicolaus has a hold rating on Mohawk Industries, saying "We are long-term bullish but near-term cautious," on the company.

Stifel expects that much of Mohawk's future growth will come overseas, and it does not expect Mohawk to pursue major acquisitions in the near term.

"We do not see major acquisitions on the horizon, but Mohawk will continue to look for opportunities. The company will remain focused on flooring but more so outside of the U.S. as many foreign markets represent greater share opportunities and faster growth," the report says.

The firm notes that residential flooring markets both in the U.S. and Europe have not improved, but are clearly showing signs of a bottoming. However, it expects U.S. commercial markets to fall another 15% this year.

Mohawk is implementing a 4-6% price increase and it oil remains in its current $80-85 per barrel range another hike is likely this year, Stifel said.

Mohawk's new Smartstrand carpet fiber appears to be gaining some market share in the residential carpet market, Stifel said, which likely was a key component to Mohawk's 8% carpet dollar decline in the fourth quarter versus an industry that was down closer to 14%.