Longbow Downgrades Whirlpool After Q2 Miss

Appliance maker Whirlpool Corporation WHR reported second-quarter results Monday that prompted Longbow Research to drop its bullish thesis. 

The Analyst

Longbow's David MacGregor downgraded Whirlpool from Buy to Neutral with no assigned price target.

The Thesis

Whirlpool's Q2 print was disappointing across most geographic regions, MacGregor said in the downgrade note. (See the analyst's track record here.) 

The analyst shared the following takeaways: 

• North America saw a 2-percent revenue decline despite some success in product pricing,
• Market share losses continued in the U.K. from Turkish manufacturer Arcelik.
• The European business was "OK," but management appears to be "frustrated" in its inability to generate volume.
• Latin America saw a 11.4-percent revenue decline, and Longbow's firsthand checks in key markets like Brazil reveal a continued struggle with difficult environmental factors. 
• The Asia-Pacific business "held up well," with double-digit volume growth.
• Whirlpool's Q2 was a "carbon copy" of the first quarter, with ongoing execution issues and share loss in key markets, MacGregor said.

Price Action

Whirlpool shares were plunging 13.95 percent to $129.68 at the time of publication Tuesday. 

Related Links:

Whirlpool's Q2 Earnings Preview

5 Reasons Why Credit Suisse Turned Bullish On Whirlpool