Mohawk Industries Inc. (MHK) 2Q26 Recap New Product Development and Operating Acumen Help Offset Rising Inflationary Headwi...

Equity Research 31 July 2026 | 6:35PM EDT

Mohawk Industries Inc. (MHK) 2Q26 Recap: New Product Development and Operating Acumen Help Offset Rising Inflationary Headwinds

MHK 12m Price Target: $153.00 Price: $123.10 Upside: 24.3% BUY Susan Maklari Upside to 2026 Estimates Led by Company-Specific Initiatives: | Goldman Sachs & Co. LLC We were impressed with Mohawk’s 2Q as investments in innovation, Charles Perron-Piche, CFA distribution, service levels, and cost actions come through. More | Goldman Sachs & Co. LLC specifically, we highlight: 1) accelerating price/mix tailwinds adding to industry relative outperformance, 2) the ability to offset Rhea Bhatia | Goldman Sachs India SPL intensifying inflationary headwinds with productivity and pricing, and 3) capital allocation focused on organic growth as well as a lower share count benefiting future EPS growth. On the call, Key Data _____________________________________ Market cap: $7.5bn management noted underlying operating conditions remain Enterprise value: $7.6bn 3m ADTV: $90.1mn challenging, with commercial end-markets outperforming housing. United States That said, we believe a focus on new products, expanding channel Americas Homebuilders & Building Products M&A Rank: 3 placement, and channel inventory management suggests a fairly GS Forecast __________________________________ balanced outlook for the second half. As such, while we model an 12/25 12/26E 12/27E 12/28E

above average sequential decline in 3Q revenues and profitability— Revenue ($ mn) New Revenue ($ mn) Old 10,785.4 10,785.4 11,148.6 10,883.4 11,157.9 11,025.1 11,470.7 11,333.5 given the 2Q outperformance and in line with the guide—we see EBITDA ($ mn) 1,355.6 1,402.0 1,363.9 1,430.2 EBIT ($ mn) potential upside as these initiatives come through. Our estimates EPS ($) New exclude future share repurchases as well, though 296mn remains on EPS ($) Old P/E (X) the existing authorization while we estimate $707mn in FCF this Dividend yield (%) -- -- -- -- year. Finally, we expect a seamless transition as Paul DeCock Net debt/EBITDA (X) 0.5 0.1 (0.4) (0.9)

assumes the CEO role in September, as previously announced. On 6/26 9/26E 12/26E 3/27E the call, Mr. DeCock talked to a continued focus on product EPS ($)

development and extending Mohawk’s leading share position GS Factor Profile ______________________________ Growth globally by leveraging its well-established operating acumen. This will be combined with substantial cash generation, supporting these Financial Returns

initiatives and shareholder returns. Given the set-up, we believe the Multiple

current valuation makes for another attractive entry point and Integrated maintain our Buy rating. Percentile 20th 40th 60th 80th 100th Price/Mix Tailwinds Lead Second Half Revenues: Given consumer sentiment, the path for sales was a focus of the call. The company MHK relative to Americas Coverage MHK relative to Americas Homebuilders & Building Products noted volume growth was strong across most segments led by new collections, expanded placements, and improved mix. More Source: Company data, Goldman Sachs Research estimates. See disclosures for details. specifically, we highlight recent launches in soft and hard surface categories in Flooring North America along with channel

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Mohawk Industries Inc. (MHK)

Mohawk Industries Inc. (MHK) Balance Sheet ($ mn) _______________________________________ BUY Rating since Dec 5, 2019 12/25 12/26E 12/27E 12/28E Cash & cash equivalents ,045.1 1,714.1 Accounts receivable 1,924.1 1,951.0 1,952.6 2,030.3 Inventory 2,661.7 2,692.9 2,703.3 2,759.3 Ratios & Valuation __________________________________________…