Analyst Upgrades Mohawk Shares to 'Buy'

Baltimore, MD, June 14, 2010--Analyst Stifel Nicolaus has upgrade shares of Mohawk Industries to "buy" with a target price of $70. The stock recently traded around $50 per share.

The company said that it believes fundamentals in the carpet segment are stronger than Street estimates and will cause estimates to rise through time.

It also noted that Mohawk shares have pulled back 25% from a recent peak on April 30 and that its valuation is attractive.

"Mohawk’s carpet business is poised to see much improved margins in the second half of 2010 relative to consensus view in our opinion," Stifel said.

"Shipments in residential carpet are likely to be up year over year in the mid-single digit range and prices should be up a similar amount. Weakness in commercial carpet volumes will offset some of this improvement, but we have nonetheless increased our sales assumptions for the second half of the year in the Mohawk division."

Stifel noted that Mohawk’s SmartStrand product line is selling briskly and likely enhancing margin performance.