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Will Whirlpool's Focus on Strategic Innovation Drive Growth?
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Whirlpool Corporation (WHR - Free Report) looks fairly placed backed by its robust product pipeline, solid innovations and cost productivity initiatives. It is also among the few companies that heavily invest in technologies producing differentiated products to suit the needs of their end consumers.
In addition, this leading home appliances’ manufacturer has been striving to improve its margins through a series of measures, including cost-based price increments and cost-reduction initiatives focused on improving business efficiency.
Notably, Whirlpool highlighted some of its long-term goals. Management outlined that it aims to deliver organic revenue growth of 3–5% every year on the back of its brand strength. Further, the company targets its EBIT margin to exceed 10% by 2020. The company envisions earnings per share to grow 10–15% each year.
However, the company continues to feel the pinch of currency headwinds, which are expected to linger and hurt results in 2017. The sluggish global economic environment has also been weighing on Whirlpool’s performance, in terms of weak demand in certain markets, volatility in raw material prices and risk of high customer concentration.
Also, Whirlpool’s earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters, posting an average miss of 2.1%. Moreover, its sales have missed estimates in six of the past eight quarters.
Evidently, these factors led shares of Whirlpool to underperform the Zacks categorized Consumer Discretionary sector over the past one year. While the stock declined 6.4%, the broader sector recorded growth of 15.1%.
Nevertheless, we believe that this Zacks Rank #3 (Hold) stock will overcome the hurdles supported by its growth initiatives, along with planned curtailment of fixed costs as well as robust cost-productivity plans. Moreover, it boasts a long-term earnings growth rate of 16.4%, which raises optimism in the stock.
Key Picks
Better-ranked stocks in the broader Consumer Discretionary space include SodaStream International Ltd. , Central Garden & Pet Company (CENT - Free Report) and Central European Media Enterprises Ltd. .
SodaStream, with a long-term earnings growth rate of 7.5%, has surged a whopping 85% in the past six months. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Central Garden & Pet, which carries a Zacks Rank #2 (Buy), has skyrocketed 127.8% in the past one year. Also, the stock has a long-term earnings growth rate of 10%.
Central European Media, a Zacks Rank #2 stock, rose 34.8% in the past six months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Will Whirlpool's Focus on Strategic Innovation Drive Growth?
Whirlpool Corporation (WHR - Free Report) looks fairly placed backed by its robust product pipeline, solid innovations and cost productivity initiatives. It is also among the few companies that heavily invest in technologies producing differentiated products to suit the needs of their end consumers.
In addition, this leading home appliances’ manufacturer has been striving to improve its margins through a series of measures, including cost-based price increments and cost-reduction initiatives focused on improving business efficiency.
Notably, Whirlpool highlighted some of its long-term goals. Management outlined that it aims to deliver organic revenue growth of 3–5% every year on the back of its brand strength. Further, the company targets its EBIT margin to exceed 10% by 2020. The company envisions earnings per share to grow 10–15% each year.
Whirlpool Corporation Price and Consensus
Whirlpool Corporation Price and Consensus | Whirlpool Corporation Quote
However, the company continues to feel the pinch of currency headwinds, which are expected to linger and hurt results in 2017. The sluggish global economic environment has also been weighing on Whirlpool’s performance, in terms of weak demand in certain markets, volatility in raw material prices and risk of high customer concentration.
Also, Whirlpool’s earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters, posting an average miss of 2.1%. Moreover, its sales have missed estimates in six of the past eight quarters.
Evidently, these factors led shares of Whirlpool to underperform the Zacks categorized Consumer Discretionary sector over the past one year. While the stock declined 6.4%, the broader sector recorded growth of 15.1%.
Nevertheless, we believe that this Zacks Rank #3 (Hold) stock will overcome the hurdles supported by its growth initiatives, along with planned curtailment of fixed costs as well as robust cost-productivity plans. Moreover, it boasts a long-term earnings growth rate of 16.4%, which raises optimism in the stock.
Key Picks
Better-ranked stocks in the broader Consumer Discretionary space include SodaStream International Ltd. , Central Garden & Pet Company (CENT - Free Report) and Central European Media Enterprises Ltd. .
SodaStream, with a long-term earnings growth rate of 7.5%, has surged a whopping 85% in the past six months. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Central Garden & Pet, which carries a Zacks Rank #2 (Buy), has skyrocketed 127.8% in the past one year. Also, the stock has a long-term earnings growth rate of 10%.
Central European Media, a Zacks Rank #2 stock, rose 34.8% in the past six months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>