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After Another Weak Quarter, Is Whirlpool Washed Up?

After Another Weak Quarter, Is Whirlpool Washed Up?

Shares of Whirlpool Corporation (NYSE: WHR) were trading lower by more than 10 percent early Tuesday morning after the company reported an earnings miss and revised its outlook to the downside.

Bank of America's Curtis Nagle downgraded Whirlpool's rating from Buy to Neutral with a price target slashed from $220 to $183 in reaction to the disappointing earnings report. In fact, Monday's earnings report marks the third consecutive quarter of management revising its outlook lower this year.

The company's earnings growth profile in North America are showing signs of "stalling" at a time when its competition's earnings are "elevated," the analyst said in the downgrade note. Pricing and mix trends also appear to be declining most regions and raw materials concerns seen in the quarter will likely remain heading into 2018. Also, the integration of Indesit and uncertainty over Brexit will continue to pressure EMEA margins.

Meanwhile, Whirlpool did announce a $150 million cost-cutting initiative and will raise its prices globally but these plans will merely offset some of the ongoing headwinds, Nagle also said.

Finally, it is possible for Whirlpool to show investors earnings growth heading forward the company now has "less earnings power," and management needs to improve on its execution before investors consider getting constructive on the stock.

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Latest Ratings for WHR

Oct 2020Credit SuisseMaintainsUnderperform
Oct 2020RBC CapitalUpgradesUnderperformSector Perform
Sep 2020Deutsche BankMaintainsHold

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