Truist Sees Upside for MHK with LVT Demand Softening & Leadership Change

Washington, DC, September 8, 2026—Truist released the following analysis on Mohawk (MHK):

“LVT Surge Has Pressured The MHK Story For The Last 8 Years… Prior to 2018, MHK was one of the highest multiple names in our coverage given its tremendous bottom line growth coming out of the Financial Crisis. The flooring industry has long had a tradition of individual product categories being secular gainers in residential following consumer tastes. For this reason, MHK sells virtually all types of residential flooring. Regardless, the growth of LVT starting 15+ years ago was unlike anything the industry has ever seen going from a new introduction to roughly 25-30% market share (primarily from Asian production). This pushed down volume in virtually all other categories as the overall industry growth was not helped. MHK entered the LVT market with sourcing, but more with domestic production that had multiple production issues causing MHK to fall behind. This caused earnings to start to fall in 2018 and saw even more pressure with the market downturn that started in 2022. The overall result has been a substantial contraction in multiple and the stock moving off the radar screen for many investors. Mohawk was widely seen as a company in secular decline. We would note very limited details provided to investors from management on the business made the situation even worse.

“…But Top Of LVT Share Should Allow For Industry/Company-Specific Positives to Shine. Recent years have seen LVT top out in market share in the domestic market as we discussed in our industry report here. All flooring has positive and negative attributes, and we believe LVT has now reached its peak (albeit at a substantially higher level than many in the industry expected). While we expect LVT to move with the industry but in a recovery, we suspect that all flooring products will show unit growth (even carpet), which we discuss more below. Therefore, we think MHK should feel any industry upturn but also company-specific wins should start to show up in the results. We believe this backdrop was directly in play with the 2Q26 results discussed more below.

“Cannot Stress Enough How Dramatic Management Change Is For The Stock. In June, MHK announced that long time CEO Jeff Loberbaum would be stepping down from the position with COO Paul DeCock taking over the job. We discuss this change further here. We cannot overstate the potential positive implications of this for the stock, given the strategic changes discussed below as well as the expectation of new management to increase focus on educating investors about MHK and the industry.”