Bear of the Day: Whirlpool (WHR)

Whirlpool WHR is one of the world's largest manufacturers of home appliances. The company's portfolio of products can be broadly classified into laundry appliances, refrigerators and freezers, cooking appliances, and other small household appliances such as dishwashers and mixers.

The stock is a current Zacks Rank #5 (Strong Sell), with EPS expectations down significantly across the board, falling even more just over the last week as it gears up for its next earnings release. 

Image Source: Zacks Investment Research

Whirlpool Shares Keep Falling

WHR shares just haven’t been able to turn it around, down 31% over the last three months and even more eye-popping 55% over the last year. Weak quarterly results that have consistently revealed falling sales have been impossible to ignore, with revenue declining 9% YoY throughout its latest period. 

Leading the weak performance has been a big downturn in purchases of new appliances, with a soft housing market relative to historical levels an impacting force. Simply put, if the housing market is weak, so is the demand for the new appliances that typically get purchased for them.

Image Source: Zacks Investment Research

That said, the company does have an opportunity to perhaps turn sentiment around, with its next set of quarterly results expected on August 3^rd (next Monday). Both EPS and sales expectations have been revised lower over recent months, but the quarterly sales estimate has shown a relatively more positive trajectory and has been much more stable. Sales are expected to fall 4.5% YoY on 114% lower earnings according to our consensus estimates.

Image Source: Zacks Investment Research

While sentiment and overall performance have been mightily rough over recent years, the company’s upcoming release could bring some positivity. But the current reality remains that the outlook is undoubtedly bearish, and with shares at levels not seen since 2012, investors should stay on the sidelines until it proves itself in a big way.

Bottom Line

Negative earnings estimate revisions paint a challenging picture for the company’s shares in the near term.

Whirlpool WHR is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.

For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com