RBC Capital has reduced its price target for Whirlpool (WHR, Financial) from $81 to $65, maintaining an Underperform rating on the company's shares following the release of its first-quarter results. This adjustment reflects concerns over declining demand in the near term, coupled with a significant increase in import inventory.
The analysis indicates that earnings projections for the fiscal years 2025 and 2026 are anticipated to fall short of management's expectations. This outlook is driven in part by the initial challenges posed by expected tariff impacts. The revised forecast underlines potential hurdles for Whirlpool as it navigates these market dynamics.
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 $101.78 with a high estimate of $143.45 and a low estimate of $65.00. The average target implies an upside of 29.07% from the current price of $78.86. 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 2.8, 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 34.66% from the current price of $78.855. 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.
WHR 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.
