Bear of the Day: Whirlpool (WHR)

Whirlpool WHR is one of the world's largest manufacturers of home appliances. The company's portfolio of products can be broadly classified into laundry appliances, refrigerators and freezers, cooking appliances, and other small household appliances such as dishwashers and mixers.

The stock is a current Zacks Rank #5 (Strong Sell), with analysts slashing their EPS expectations across the board.

In addition, the company resides in the Zacks – Household Appliances industry, which is currently ranked in the bottom 4% of all Zacks industries.

Whirlpool Cuts Guidance

WHR’s latest quarterly results disappointed investors, with the stock facing notable selling pressure following the release. Concerning headline figures, sales of $3.8 billion fell 5.5% YoY alongside a 44% decline in adjusted EPS.

As we can see below, the company’s top line has been very soft over recent years, seeing little growth.

What really soured sentiment, though, was the company’s guidance cut, with WHR cutting its current year free cash flow, adjusted EPS, and EBIT margin outlooks. Still, despite the negativity, WHR shares have bounced back nicely off post-earnings lows so far, up more than 10% overall over the last three months.

CEO Mark Bitzer remains confident, stating –

"As expected, the second quarter continued to be impacted by competitors stockpiling Asian imports into the U.S. Despite this, we are well positioned in North America with a robust pipeline of new products, the industry's leading U.S. manufacturing footprint, and favorable housing demand fundamentals. We are confident in our long-term strategy and believe that evolving tariff policies will ultimately support domestic manufacturers."

Bottom Line

Negative earnings estimate revisions, stemming from guidance cuts, paint a challenging picture for the company’s shares in the near term.

Whirlpool WHR is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.

For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.

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This article originally published on Zacks Investment Research (zacks.com).

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