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Bull of the Day: Whirlpool (WHR)

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Founded in 1955, Whirlpool Corp. (WHR - Free Report) is one of the largest manufacturers of home appliances in the world, making products in 14 different countries and markets. Its portfolio is big and varied, and includes laundry appliances, refrigerators and freezers, cooking appliances, and smaller household appliances like dishwashers and mixers.

Q2 Earnings Recap

Back in July, WHR popped as much as 10% after the company released better-than-expected second quarter earnings.

Net sales hit $4 billion on top of adjusted earnings of $2.15 per share, and while both the top and bottom line declined sharply year-over-year, both came in ahead of Wall Street expectations.

Breaking sales down by region, North America was only down 12.5% compared to the year-ago quarter, but Asia and Latin America were hit extremely hard, with sales falling 37% and 51%, respectively. Consumers possibly using their stimulus checks to buy big appliances likely helped bolster North American sales.

WHR’s outlook also improved, and the company now expects the overall drop in sales for the fiscal year to be between 10% and 15%, a big improvement from the previous sales drop between 13% and 18%.

CEO Marc Bitzer said that WHR delivered “a solid Q2 performance despite the far reaching impact of COVID-19 on our business is the result of the decisive actions we took throughout the quarter and ultimately demonstrates the resilience of our business model."

WHR is Soaring

 

Whirlpool Corporation Price and Consensus

 

Since March 23, shares of WHR have surged over 146% compared to the S&P 500’s 46.7% increase. Earnings estimates have been rising too, and WHR is a Zacks Rank #1 (Strong Buy) right now.

For the current fiscal year, five analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up well over two dollars to $12.50 per share. Earnings are expected to fall almost 22% compared to the prior year period, but 2021 looks strong, and earnings should see double-digit year-over-year growth.

WHR is also a dividend stock, and shares currently yield a solid 2.6%; its payout ratio is only 36%, providing shareholders a good buffer in these uncertain economic times.

Investors were rightfully optimistic after WHR’s Q2 earnings report, as the appliance giant showed strengthening demand during the height of the coronavirus pandemic.

If you’re an investor searching for a consumer discretionary stock to add to your portfolio, make sure to keep WHR on your shortlist.

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