NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Despite the weak revenue results, WHR has significantly outperformed against the industry average of 41.1%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has significantly decreased to -$423.00 million or 88.83% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WHIRLPOOL CORP has marginally lower results.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Household Durables industry and the overall market, WHIRLPOOL CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Whirlpool Corporation engages in the manufacture and marketing of home appliances worldwide. Its principal products include laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers, and other portable household appliances. The company has a P/E ratio of 13.8, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Whirlpool has a market cap of $5.3 billion and is part of the
industry. Shares are up 45.2% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff