Bear of the Day: Whirlpool (WHR)

Whirlpool WHR is one of the world's largest manufacturers of home appliances, with its portfolio spanning laundry appliances, refrigerators, freezers, cooking appliances, and other household products.

The stock is a current Zacks Rank #5 (Strong Sell), with EPS expectations remaining on a bearish trajectory across the board. Weak appliance demand, continued margin pressures, and a sizable reduction in full-year earnings guidance have all contributed to the bearish picture.

Whirlpool Keeps Disappointing

Weak quarterly results from WHR have been impossible to ignore, with sales falling 8.8% YoY to $3.68 billion in the latest period, alongside a sharp drop in earnings from $2.09 per share in the same period last year to a loss of -$0.21 per share. The results reflected its fourth consecutive double-miss relative to our consensus expectations, with the average EPS surprise over the period coming in at -101.5%.

A challenging environment for appliance demand has driven the weak performance, with continued softness in the housing market an impacting force. Fewer home purchases mean less opportunities for appliance sales, a trend that has continued to weigh on Whirlpool's results for years now.

The company also lowered its full-year earnings outlook significantly in the above-mentioned release, now expecting a loss of -$1.30 per share in its current fiscal year compared to its prior guidance of $2.50 to $3.00 per share. The reduced outlook fully reflects the challenges WHR continues to face, with a softer-than-expected recovery clearly impacting its earnings power.

Bottom Line

Negative earnings estimate revisions 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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