Whirlpool Corporation (NYSE: WHR) reported strong North America margins for the second quarter, with price and mix beating cost inflation, and raised its full-year guidance by 4%.
KeyBanc’s Kenneth Zener maintained an Overweight rating on Whirlpool with a price target of $150.
Whirlpool reported 2.7% sales growth in North America. Although units declined 1%, price and mix improved 4% resulting is an EBIT of 12.4%, Zener said in the note.
He added that the company is likely to witness limited margin pressure, if demand in North America remains stable.
Whirlpool struggled a little in Europe during the second quarter, with sales down 6%. Although units grew 2%, lower prices and unfavorable FX trends were drags on the sales figure, Zener explained. Meanwhile, LatAm sales rose 4% backed by growth in units and price/mix improvement.
Whirlpool raised its fiscal year 2019 guidance to $14.75-$15.50, despite lower free cash flow due to EMEA restructuring. The analyst raised the EPS estimates for 2019 and 2020 from $14.61 to $15.01 and from $15.76 to $15.98, respectively.
“We still think WHR's investment case will be easier to make as its business globally simplifies, in line with near vanilla N.A. results in recent quarters,” Zener wrote.
Shares of Whirlpool had risen almost 2% to $144.94 at time of publishing on Wednesday.
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|Jun 2019||Upgrades||Sector Weight||Overweight|
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