JPMorgan downgraded Whirlpool Corporation (NYSE:WHR) to a Neutral rating on Tuesday after having the consumer products stock set at Overweight.
While the firm still views the stock as inexpensive at only roughly 5.2X the 2023 EBITDA estimate, analyst Michael Rehaut and team believe that investor concerns regarding the sustainability of North American margins will continue to impact valuation, which may increase over the next 6 to 12 months amid a potentially more promotional and competitive backdrop
The outlook for Whirlpool (WHR) reflects recent investor concerns and headwinds that have led to more constrained valuations for the stock and expectation that the broader sector will remain in place over the near to medium term.
"Specifically, these concerns and headwinds include the sustainability of demand and the companies’ recently elevated earnings, several companies’ European exposure, continued cost inflation, and the higher interest rate backdrop and a potentially slowing U.S. macroeconomy."
JPMorgan's new December 2023 price target on Whirlpool (WHR) is $137, which works out to roughly 5.5X the 2024 EV/EBITDA estimate and represents a return to roughly in-line with the sector average.