Whirlpool Stock Gets Flushed as Goldman Sachs Lowers Target


NEW YORK (TheStreet) -- Whirlpool (WHR) stock is getting flushed by investors Wednesday after a Goldman Sachs report lowered the price target for the stock -- even though the company on Tuesday raised its full-year earnings per share and free cash flow guidance and reported a more than doubling of second-quarter net income.

The second quarter was helped by cost reduction and productivity initiatives, global unit volume growth and increased monetization of certain tax credits.
Whirlpool

Whirlpool's earnings exceeded Goldman Sachs' expectations.

However, "the stock traded down 3%, as the Street was unforgiving on the market share losses in North America and tough comparisons in Brazil," Goldman Sachs analyst Joshua Pollard explained in an investor note. Subsequently, Pollard reduced his six-month price target for Whirlpool to $106 from $130.

At the same time, Pollard is reiterating his buy rating on the stock.

"We believe that the Street is ignoring several positive developments," he wrote.

Pollard pointed to several of these positive developments including: Whirlpool is outgrowing large peers such as Electrolux ( ELUXY ) and GE ( GE) in North America; is shedding its less-profitable OEM business; pricing for the company has been stable in the US; profit margins are very encouraging in Latin America even as the company laps tough sales growth comparisons; and the company's ongoing cost cuts in Europe and Asia.

Key risks for Whirlpool include a "swift" rise in steel prices, Pollard noted.

Shares of Whirlpool stock dropped by 3% to $86.02 in Wednesday in noontime trading, after dropping to as low as $84.60 earlier in the day.

Electrolux has risen 1.4% to 43.60 and General Electric is up 0.7% to $15.04.

-- Reported by Andrea Tse in New York

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