Whirlpool: Margin Disappointment And Market Headwinds Persist (Rating Downgrade)

Summary

• Whirlpool shares have underperformed, falling 4% over the past year, with a recent 18% plunge due to disappointing guidance amid slow US housing recovery.
• The company struggles with high interest rates impacting homebuying, leading to uneven recovery and margin expansion, despite some cost-saving initiatives.
• Whirlpool's free cash flow just covers its dividend, and high debt levels necessitate significant debt reduction, limiting potential for share buybacks and price recovery.
• Given ongoing macroeconomic challenges and limited growth prospects, I am downgrading Whirlpool to a "hold" with expectations of it being a market-performer.

Osvaldo Maldonado

Shares of Whirlpool (NYSE:WHR) have been a meaningful underperformer over the past year, falling 4%, as the company has struggled with a slow recovery in US housing activity. Shares recently had gained some momentum, but this was wiped out with

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.