Market Overview

KeyBanc Sees Some Upside In Whirlpool After Solid Q2, Outlook

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KeyBanc Sees Some Upside In Whirlpool After Solid Q2, Outlook

Whirlpool Corporation (NYSE: WHR) reported strong North America margins for the second quarter, with price and mix beating cost inflation, and raised its full-year guidance by 4%.

The Analyst

KeyBanc’s Kenneth Zener maintained an Overweight rating on Whirlpool with a price target of $150.

The Thesis

Whirlpool reported 2.7% sales growth in North America. Although units declined 1%, price and mix improved 4% resulting is an EBIT of 12.4%, Zener said in the note.

He added that the company is likely to witness limited margin pressure, if demand in North America remains stable.

Whirlpool struggled a little in Europe during the second quarter, with sales down 6%. Although units grew 2%, lower prices and unfavorable FX trends were drags on the sales figure, Zener explained. Meanwhile, LatAm sales rose 4% backed by growth in units and price/mix improvement.

Whirlpool raised its fiscal year 2019 guidance to $14.75-$15.50, despite lower free cash flow due to EMEA restructuring. The analyst raised the EPS estimates for 2019 and 2020 from $14.61 to $15.01 and from $15.76 to $15.98, respectively.

“We still think WHR's investment case will be easier to make as its business globally simplifies, in line with near vanilla N.A. results in recent quarters,” Zener wrote.

Price Action

Shares of Whirlpool had risen almost 2% to $144.94 at time of publishing on Wednesday.

Related Links:

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Whirlpool Reports Q2 Earnings Beat

Latest Ratings for WHR

DateFirmActionFromTo
Jul 2019MaintainsNeutral
Jun 2019UpgradesSector WeightOverweight
May 2019UpgradesNeutralBuy

View More Analyst Ratings for WHR
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Posted-In: Kenneth Zener KeyBanc Capital MarketsAnalyst Color Earnings News Reiteration Analyst Ratings

 

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