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Walmart (NYSE: WMT) and Mohawk Industries (NYSE: MHK) have received positive analyst upgrades from JPMorgan and Raymond James, respectively, reflecting strong outlooks and favorable market positions.
JPMorgan upgraded Walmart to “Overweight” with a price target of $81, citing expectations of multi-year double-digit EPS growth, while Raymond James upgraded Mohawk Industries to “Strong Buy” with a price target of $140, based on a positive outlook and historical valuation metrics.
Both companies have shown recent stock price increases in premarket trading, despite varying macroeconomic challenges, and are supported by analyst optimism and strategic positioning in their respective sectors.
JPMorgan Upgrades Walmart to “Overweight”, Sets $81 Price Target
JPMorgan has upgraded Walmart’s stock rating from “Neutral” to “Overweight”, reflecting a strong balance of defense and offense for the retail giant.
The firm increased Walmart’s price target from $66 to $81, citing expectations of multi-year double-digit EPS growth driven by market share gains and international segment profit inflection. Walmart’s fiscal year forecast was raised in May following better-than-expected quarterly results, with anticipated benefits from higher-margin alternative profit pools.
The upgrade also considers macroeconomic factors such as a softening consumer backdrop and an uncertain second half of 2024.
Walmart’s stock has risen 31.76% year-to-date as of the last close, with 37 of 40 analysts rating the stock as “buy” or higher, and a median price target of $71.50. The company’s EPS forecast for 2024 is maintained at $2.57, above the Wall Street consensus of $2.43.
Walmart’s stock rose by 1.44% in premarket trading on June 10, 2024 at the time of writing, reflecting its strong performance and significant returns over the past five years, outpacing the S&P 500.
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Raymond James Upgrades Mohawk Industries to “Strong Buy”, Sets $140 Price Target
Raymond James has upgraded Mohawk Industries’ stock rating from “Market Perform” to “Strong Buy”, setting a new price target of $140.00.
The upgrade is based on a positive outlook and historical valuation metrics, reflecting a strong correlation between Mohawk’s stock performance and FNA margins. The recent decrease in WTI prices since the Q1 financial report is considered a positive factor, and Mohawk’s shares are viewed as below net asset appraised/replacement value, offering a favorable risk-reward balance.
Mohawk Industries reported mixed Q1 2024 results, with net sales decreasing by 4.5% to $2.7 billion, while adjusted EPS rose by 6% to $1.86. Despite challenges in the residential remodeling sector, the company remains optimistic about a market recovery in the second half of the year. Jefferies upgraded Mohawk’s stock price target to $130.00, maintaining a “Hold” rating.
The firm’s market capitalization stands at $7.24 billion, with a forward-looking P/E ratio adjusted to 13.31 and a solid gross profit margin of 25.44%.
MHK increased by 2.27% in premarket trading on June 10, 2024, despite a challenging macroeconomic backdrop. The company’s financials reveal a mixed picture with a negative net income and profit margin, but significant free cash flow.
Analyst price targets range from $108 to $145, focusing on potential recovery and value investing strategies. Mohawk’s performance reflects its positioning in the furnishings, fixtures, and appliances sector, with strategic measures in place to navigate market challenges.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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