WHR - Is Whirlpool Stock a Buy?
2024-02-04 09:55:00 ET
Whirlpool (NYSE: WHR) stock looks like a great value. After all, the midpoint of its earnings guidance puts it at less than eight times earnings, and the nearly-6.4% dividend yield is highly enticing for income-seeking investors. However, it's not without risk, and investors must consider all angles before buying in. Here's an assessment of the investment case for the stock.
This company's fortunes are tied to the housing market, particularly the U.S. housing market. And, as everybody knows, a rising interest rate environment hit the housing market hard in 2023.
As such, the company enters 2024 with margin pressures and end-market headwinds. CEO Marc Bitzer noted on the recent earnings call Whirlpool's earnings before interest and taxation (EBIT) margin of 6.3% for 2023 was "more than one point short of where we wanted to be. And we were not able to reduce our inventories fast enough, which negatively impacted our full cash flow."
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Is Whirlpool Stock a Buy?