filasas.blogg.se - Mohawk floor generator

#MOHAWK FLOOR GENERATOR GENERATOR#

Core carpet brands are Mohawk, Karastan and Durkan. This segment sells carpet, rugs, laminate, LVT, sheet vinyl, and wood-floor products. This segment sells ceramic tiles and countertops in North America, Europe and Russia, where it maintains market share leadership through its Daltile, Marazzi, Kerama, and EmilGroup brands.Ģ) Flooring North America: 42% of consolidated sales. The company reports operating earnings in three segments:ġ) Global Ceramics: 36% of consolidated sales. 63% of total 2017 sales occurred in the U.S., while 25% were from Europe.

Its core brands include: American Olean, Daltile, Durkan, Karastan, Marazzi, Mohawk, Pergo, Unilin, Quick-Step and IVC. Over the past decade the company has transformed itself through strategic acquisitions from a U.S.-based carpet and rug manufacturer to the largest diversified flooring company in the world. Mohawk’s size and integration allow it be a low-cost producer of carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring. Mohawk Industries is a leading global flooring manufacturer for the residential and commercial markets. We see only 15% downside risk from current levels. Current 2019 free-cash-flow yield of 8.5% supports minimal downside in stock.

PE and EV/EBITDA multiples imply $330/sh valuation/price target. Our above consensus earnings estimates applied to 5-yr avg.

20% drop in stock since December 2017 presents 40% upside in stock in 12 months.

While this remains a risk, current data reflects strong housing market and outlook for home repair and remodel activity is very attractive. Pricing has been implemented and MHK has a good track record of recovering costs.

First-half 2018 costs elevated due to raw material inflation and lingering start-up/integration costs of recent investments.

And MHK’s 2015 acquisition of IVC positions it well for high growth LVT marketģ) Short-term concerns present opportunity to buy excellent business at a discount: 40% upside. Ceramic tile and luxury vinyl tiling (LVT) remain high growth areas for the company.īolt-on acquisitions have positioned MHK as a leader in solid-growth ceramic-tile market. Management has diversified away from slow-growth-but-solid FCF carpet products in favor of fast-growth, higher-margin hard surface products. Housing fundamental dynamics support growth in home repair & remodeling outlook.Ĭ. flooring demand remains 20% below last cycle’s peak in 2006.ī. MHK effectively uses its strong cash flow to consolidate markets, create internal synergies and invest in growth.Ģ) Despite our investment thesis being primarily based on company-controlled, internal growth drivers, the cyclical outlook for the North America flooring industry remains attractive.Ī. Favorable industry positioning and fundamental dynamics: MHK holds #1 market share in a generally fragmented industry in most regions it operates in. CEO is largest shareholder with 15% stake and responsible for the company’s successful transformation. Highly effective CEO with substantial alignment to shareholders interests. Management’s successful track record is based on two factors: We have high confidence in management given a five-year look-back analysis of investments made, which indicates an exceptional track record of executing on high-return projects.Ĭ.

Management expects these projects to deliver $1.6b in potential incremental sales.ī. Management has invested $1.6b in internal projects in 2016/17 that have yet to be realized. Low cost, market leader in flooring business generates solid cash flow to invest in high-return productivity projects, capacity expansions, and highly accretive bolt-on acquisitions.Ī. We see a 40% upside in 12 months.ġ) Substantial recent capital investments should drive strong organic earnings and cash flow growth over the next two years.

#MOHAWK FLOOR GENERATOR GENERATOR#

Near-term concerns present an opportunity to buy this strong cash flow generator and consistent earnings compounder with significant pent-up organic growth drivers. (MHK) is the global leader in flooring manufacturing.