Shares of home appliances giant Whirlpool Corporation (NYSE:WHR) got a significant boost, closing over 6% higher on Wednesday, June 12. This jump was spurred by a report from Betaville indicating that the company has attracted interest from potential buyers.
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The rise in Whirlpool stock stands in contrast to the recent struggles the company has faced in the North American market. The company witnessed sluggish sales growth, with the first quarter of 2024 seeing weak industry volumes. Elevated promotional activity, driven by persistently high interest rates, has dampened consumer discretionary spending, compounding the company’s challenges.
WHR’s Strategic Moves to Remain Afloat
Whirlpool is actively working on cost-cutting measures and portfolio restructuring to bolster growth and maintain its market share in response to the ongoing demand headwinds. A notable move in this direction was the sale of its 24% stake in Whirlpool of India during the first quarter. The company still holds a controlling 51% interest in India’s business.
Additionally, the company is focused on derisking its balance sheet and reducing financial leverage, which is positive.
While Whirlpool will likely face challenges from an elevated promotional environment and high interest rates, it will likely benefit from its solid product pipeline for 2024. Moreover, the company is taking action to reduce costs in the second half of the year, which will likely cushion its earnings.
Analysts Weigh In
The future trajectory of Whirlpool remains uncertain, as it remains to be seen whether the company will pursue a sale or explore internal strategies to reignite growth. Meanwhile, analysts have mixed opinions on WHR stock.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on WHR highlight that Whirlpool’s focus on cost reduction, operational streamlining, and balance sheet deleveraging could enhance the company’s profitability.
Conversely, analysts bearish on Whirlpool stock caution that high interest rates and weak discretionary demand could affect its performance. Further, they warn about the elevated promotional environment and the company’s high financial leverage.
Is Whirlpool a Good Stock to Buy?
Wall Street remains sidelined on Whirlpool stock amid ongoing demand headwinds. With two Buys, one Hold, and two Sell recommendations, WHR stock has a Hold consensus rating.
Whirlpool stock is down over 20% year-to-date. The analysts’ price target on WHR stock is $101, implying a limited upside potential of 7.39%.
