BRISTOL, England, August 10, 2017 /PRNewswire/ --
NYSE:WHR $350 Price Target. On July 27th, a Reuters article quoted technical analysts as providing a lofty $350 price target if the stock can re-take $203. The share price has since dropped to under $180 following a recent earnings update which outlined poorer than expected sales and profit. Sales in the EMEA region declined 5% whist the company reported sequential operating margin improvement in the EMEA region. Latin America saw a 1% drop and Asia sales flat compared with a year ago.
Top line revenue for the quarter was slightly higher than expected at $5.3bln vs $5.2bln a year earlier. Providing another bright spot was North America, Whirlpool's largest market where sales increased 9% not including the impact of currency fluctuations.
Adjusted operating profit dropped 14.6% to $373 million from $437 million in the same quarter in 2016, the operating margin contracted 150 basis points to 6.9%. Also affecting the quarter was an adverse product price/mix where raw material inflation almost fully negated gains from increased unit volumes (sales) and ongoing cost productivity.
Whirlpool's portfolio of products are broadly classified into laundry appliances, refrigerators and freezers, cooking appliances, and other small household appliances such as dishwashers and mixers. Its brand names include Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Gladiator, Affresh, Every Drop, Swash and Bauknecht.
Guidance
Management remained pleased with ongoing growth strategies, disciplined operational execution and balanced capital allocation and anticipates profitable growth in the EMEA region throughout the second half of 2017 whilst also expecting to navigate through volatility in emerging markets.
Whirlpool continues to anticipate generating free cash flow of about $1 billion for FY2017, while it revised operating cash flows guidance to range from $1.65-$1.7 billion, revised down from $1.7-$1.75 billion. Revised guidance did include restructured cash outlays of up to $165 million, legacy product warranty and liability costs of $70 million, pension contributions of $45 million and capital expenditures of $650-$700 million, down from $700-$750 million previously expected.
The company also approved an additional share repurchases worth $2 billion, bringing the total available share repurchases to $2.35 billion. The company expects to continue rewarding shareholders through increased dividends, as it did in April with a 10% rise, and more share repurchases.
Price Targets NYSE:WHR $350 Price Target
NYSE:WHR $350 Price Target. The average price target is $205.50 based on 11 estimates.
According to wsj.comthe average price target is $205.50 with the highest being $230. Reutersquoted technical analysts', notably Zachary Mannes, lead analyst at Stock Waves, part of ElliottWaveTrader.net, suggested Whirlpool will turn sharply higher if it can break through $203 per share. If that happens, Mannes told Barron's, the next stop would be in "the $350 region."
NYSE:WHR $350 Price Target
Technical Analysis
RSI is currently 54 suggesting currently neutral.
Strengths
The current price presents a good opportunity for investors interested in buying the stock for mid or long-term. The share is moving closer to its lower bound at $171 in weekly data. Given slight differences in analysts' forward estimates, the group's business visibility is very good.
Whirlpool can be considered undervalued, with an "enterprise value to sales" ratio at 0.76 for the 2017 fiscal year. With a P/E ratio at 14 for 2017 and 11 for 2018, earnings multiples are highly attractive compared with competitors.
The average target price set by analysts covering the stock, currently at $205.50, is well above current prices and offers a tremendous potential for appreciation.
On April 17 Whirlpool rewarded shareholders with a 10% quarterly dividend hike. With this, the company's dividend has increased to $1.10 per share from $1.00 paid earlier.
Weaknesses
Low growth outlooks, underscored by recent earnings. Whirlpool dose not stand among those with the highest top line growth potential.
Financial statements repeatedly disappointed market stakeholders. Most recently were below Wall St expectations.
In recent weeks analysts have been lowering their EPS expectations for the company and in the last few months, analysts have revised their earnings forecast down.
For the past year, analysts have significantly revised downwards their profit estimations.
Summary
The company has solid fundamentals for a short-term investment strategy and the current price provides a very good entry point for longer term investors wishing to benefit from the recent weakness.
About Whirlpool: Whirlpool Corporation is a manufacturer and marketer of home appliances. The Company's segments include North America; Europe, Middle East and Africa (EMEA); Latin America, and Asia. In North America, the Company markets and distributes home appliances and small domestic appliances under a range of brand names.
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