Yahoo Finance At US$126, Is It Time To Put Whirlpool Corporation (NYSE:WHR) On Your Watch List?
Whirlpool Corporation (NYSE:WHR), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$159 and falling to the lows of US$126. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Whirlpool's current trading price of US$126 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Whirlpool’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Whirlpool
What's The Opportunity In Whirlpool?
According to my valuation model, Whirlpool seems to be fairly priced at around 4.13% above my intrinsic value, which means if you buy Whirlpool today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $121.09, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Whirlpool’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Whirlpool?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an expected decline of -3.5% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Whirlpool. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, WHR appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on WHR for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on WHR should the price fluctuate below its true value.
If you want to dive deeper into Whirlpool, you'd also look into what risks it is currently facing. Case in point: We've spotted 3 warning signs for Whirlpool you should be mindful of and 1 of them makes us a bit uncomfortable.
If you are no longer interested in Whirlpool, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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