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Consumer discretionary businesses are levered to the highs and lows of economic cycles. Over the past six months, it seems like demand may be facing some headwinds as the industry’s 3.9% return has lagged the S&P 500 by 17.2 percentage points.
Mohawk Industries trades at $119.51 per share and has stayed right on track with the overall market, gaining 17.2% over the last six months. At the same time, the S&P 500 has returned 16.9%.
MHK fell 7% after CEO Jeff Lorberbaum's pre-retirement stock sales. With a reasonable valuation -- 11.9x 2026 EPS multiple with an 11.2% FCF yield -- mortgage-rate headwinds could pressure remodel demand into 2027. Risk-tolerant investors ought to buy now.
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