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The stock fell about 47% in 2011 and has risen 49% year to date. Whirlpool is
benefiting from an improving economy.
"Whirlpool expects to generate $100M-$150M of FCF (before dividends) as cash sources are projected to exceed cash uses of $914M. Including dividends ($148M in FY11), we see FY12 FCF flat to slightly negative, making it likely that the Company will refinance its $350M May 2012 notes," Bank of America Merrill Lynch analysts wrote in a Feb. 7 report. "Leverage at 1.7x total debt/EBITDA
earnings before interest, taxes, depreciation and amortization
is low relative to its low-BBB credit rating and incremental debt issuance should not result in negative ratings actions. An upgrade to WHR's mid-BBB target in FY12 would require a significant improvement in industry outlook and solid top-line and EBITDA growth, which we think is unlikely given the macroeconomic backdrop."
Whirlpool was upgraded to a buy from a
from a hold by
Of the seven analysts who cover the company, three rated it a buy. Two analysts considered the company a hold and two considered it a sell.
Whirlpool has an estimated price-to-earnings ratio for next year of 9.42; the average for durable household product companies is 11.34. For comparison,
Tupperware(TUP) has a forward P/E of 11.06 and
Lifetime Brands(LCUT) has a forward P/E of 6.66.
TheStreet Ratings gives Whirlpool a B- grade with a
$81.70 price target. The stock closed Tuesday at $70.70.