As Whirlpool Corporation (WHR, Financial) gears up to release its quarterly earnings, the options market is showing heightened activity. The volume of options trading has surged to 1.4 times the typical level, with a notable preference for puts over calls at a ratio of 7:4. This shift suggests that traders are positioning themselves for potential market fluctuations.
The implied volatility for WHR indicates an expected stock movement of approximately 6.2%, or $4.79, following the earnings announcement. Historically, the stock's median movement after earnings over the last eight quarters has been 8.4%, pointing to a significant interest in how the company will perform this time around.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Whirlpool Corp (WHR, Financial) is $105.06 with a high estimate of $143.45 and a low estimate of $67.00. The average target implies an upside of 35.24% from the current price of $77.69. More detailed estimate data can be found on the Whirlpool Corp (WHR) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Whirlpool Corp's (WHR, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Whirlpool Corp (WHR, Financial) in one year is $106.19, suggesting a upside of 36.69% from the current price of $77.685. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Whirlpool Corp (WHR) Summary page.
Key Business Developments
Release Date: January 30, 2025
- Revenue Growth: 2% organic growth in Q4 2024.
- Ongoing Earnings Per Share: $4.57 in Q4 2024.
- Dividend: Maintained at $1.75 per share.
- Free Cash Flow: $385 million in 2024.
- Cost Reduction Initiatives: Approximately $300 million in 2024.
- Debt Reduction: $500 million paid down in 2024.
- Cash Returned to Shareholders: Approximately $400 million in dividends.
- Global EBIT Margin Expansion: 80 basis points year-over-year in Q4 2024.
- MDA North America EBIT Margin: 6.7% in Q4 2024.
- MDA Latin America EBIT Margin: 7.6% in Q4 2024.
- MDA Asia EBIT Margin: 1.2% in Q4 2024.
- SDA Global EBIT Margin: 12.5% in Q4 2024.
- 2025 Revenue Guidance: Expected growth of approximately 3% to $15.8 billion.
- 2025 Ongoing EBIT Margin Guidance: Expected expansion to approximately 6.8%.
- 2025 Free Cash Flow Guidance: Expected between $500 million to $600 million.
- 2025 Debt Reduction Target: $700 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Whirlpool Corp (WHR, Financial) achieved significant cost reductions of approximately $300 million, contributing to improved operational performance.
- The company successfully completed the Europe transaction, unlocking substantial value creation opportunities.
- Whirlpool Corp (WHR) returned approximately $400 million of cash to shareholders through dividends and paid down $500 million of debt, reinforcing its commitment to reducing debt levels.
- The company achieved a sequential increase in ongoing EBIT margin by 170 basis points, marking three consecutive quarters of margin expansion.
- Whirlpool Corp (WHR) delivered strong net sales growth in its MDA Latin America and MDA Asia businesses, driven by pricing actions and industry growth.
Negative Points
- Whirlpool Corp (WHR) acknowledged that its financial performance in 2024 did not meet expectations, with challenges in the macro environment, particularly in the US.
- The company experienced a negative impact on price and mix, which unfavorably affected margins by 100 basis points due to retailer destocking in North America.
- Net sales in the MDA North America business declined by 1% in the fourth quarter, driven by negative price mix and structural retailer destocking.
- The company anticipates a slow and gradual improvement in the US housing market in 2025, with no significant catalysts for existing home sales.
- Currency fluctuations, particularly the weakening of the Brazilian real relative to the US dollar, negatively impacted margins by 25 basis points year over year.
