Stock Analysis & Valuation Tarkett S.A. (TKTT.PA)

• Previous Close: €17.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	39.32	131
Intrinsic value (DCF)	6.36	-63
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Tarkett S.A. (TKTT.PA) is a global leader in innovative flooring and sports surface solutions, serving both residential and commercial markets. Founded in 1886 and headquartered in Paris, France, the company offers a diverse product portfolio, including vinyl, laminate, wood, carpet, linoleum, and artificial turf. Tarkett operates across key sectors such as education, healthcare, hospitality, retail, and sports, emphasizing sustainability and circular economy principles in its manufacturing processes. As a subsidiary of Société Investissement Deconinck, Tarkett leverages its long-standing industry expertise to maintain a strong presence in Europe, North America, and emerging markets. The company’s commitment to eco-friendly materials and design-driven solutions positions it as a key player in the competitive flooring industry, catering to evolving consumer and business demands for durable, aesthetically pleasing, and sustainable surfaces.

Investment Summary

Tarkett presents a mixed investment profile. On one hand, its diversified product range and global footprint provide resilience against regional market fluctuations. The company’s focus on sustainability aligns with growing regulatory and consumer trends favoring eco-conscious products. However, recent financials show challenges, including a net loss of €62.6 million in the latest fiscal year, which may raise concerns about profitability. Operating cash flow remains positive (€287.2 million), suggesting operational efficiency, but high total debt (€790.3 million) could pressure liquidity. The lack of dividends may deter income-focused investors. Given its moderate beta (0.894), Tarkett could appeal to investors seeking exposure to the industrials sector with lower volatility, but turnaround execution and debt management are critical to watch.

Competitive Analysis

Tarkett competes in the highly fragmented global flooring industry, where differentiation hinges on product innovation, sustainability, and distribution reach. The company’s competitive advantage lies in its broad portfolio spanning both premium and value segments, coupled with a strong reputation in sports surfaces (e.g., artificial turf for stadiums). Its emphasis on circular economy practices, such as recycling programs for used flooring, sets it apart in an industry under increasing environmental scrutiny. However, Tarkett faces intense competition from larger players with greater scale (e.g., Mohawk Industries) and regional specialists with deeper local market penetration. Pricing pressure from low-cost Asian manufacturers further complicates margin stability. While Tarkett’s European heritage lends credibility in design-centric markets, it must accelerate digital transformation (e.g., e-commerce for B2B customers) to counter rivals with more advanced omnichannel strategies. The company’s sports segment provides niche growth potential but requires sustained R&D investment to maintain leadership against specialized competitors like SportGroup.

Major Competitors

• Mohawk Industries (MHK): Mohawk is the world’s largest flooring manufacturer by revenue, with dominant positions in carpet, ceramic tile, and laminate. Its scale advantages in raw material sourcing and distribution dwarf Tarkett’s, but Mohawk’s heavy reliance on the U.S. residential market exposes it to housing cycle risks. Unlike Tarkett, Mohawk has been consistently profitable, though its sustainability initiatives lag behind Tarkett’s European standards.
• Shaw Industries Group (SWGAY): A subsidiary of Berkshire Hathaway, Shaw excels in carpet and resilient flooring for North American markets. Its vertically integrated supply chain ensures cost efficiency, but limited international presence contrasts with Tarkett’s global reach. Shaw’s focus on mid-market residential products creates less direct overlap with Tarkett’s strength in commercial and sports applications.
• Floor & Decor Holdings (FLO): A fast-growing specialty retailer, Floor & Decor competes via a low-price, high-volume model emphasizing hard-surface flooring. Its asset-light approach contrasts with Tarkett’s manufacturing focus. While FLO lacks Tarkett’s product breadth, its direct-to-consumer expertise poses a threat in key markets like the U.S.
• Gerflor Group (GER): A private French rival, Gerflor specializes in vinyl and sports flooring, directly competing with Tarkett in European commercial and institutional segments. Gerflor’s agility allows for faster customization, but Tarkett’s broader geographic footprint and R&D budget give it an edge in innovation.
• Bekaert (BEKA.BR): Primarily a steel wire producer, Bekaert’s artificial grass division competes with Tarkett in sports surfaces. Bekaert’s technical expertise in synthetic turf fibers is formidable, but Tarkett’s integrated flooring solutions (e.g., combining turf with shock pads) offer more holistic project capabilities.