Why This Whirlpool Analyst Says There's More Pain Ahead

Whirlpool Corporation’s WHR margins could contract going forward due to elevated costs and a sharp decline in overall appliance demand and softening prices, according to BofA Securities.

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The Whirlpool Analyst: Elizabeth Suzuki downgraded Whirlpool from Neutral to Underperform while reducing the price target from $155 to $119.

The Whirlpool Takeaways: The Association of Home Appliance Manufacturers (AHAM) estimates that the monthly major appliance volume growth in the US to have moderated from 86.6 million units in 2021 to 80.4 million units in 2022, Suzuki said in the downgrade note.

“If 4Q appliance volumes decline at the 3Q pace of -13% YoY, full-year 2022 appliance volumes could be down 9% YoY,” the analyst said.

“We view the risk as more skewed to the downside that demand weakens further given rising rates, persistent inflationary pressure on the consumer, and a material slowdown in housing,” she said.

The bigger disappointment Whirlpool’s third-quarter print was its ongoing EBIT margins, “which contracted significantly in every region,” Suzuki further mentioned.

WHR Price Action: Shares of Whirlpool were down 1.01% at $135.65 Wednesday afternoon. 

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