On Thursday, Loop Capital initiated coverage on shares of Whirlpool Corporation (NYSE:WHR), assigning a Buy rating to the stock with a price target of $140.00. The firm expressed a positive outlook on the appliance manufacturer, noting a favorable time to engage with the company as its shares have seen a 10% decline year-to-date, in contrast to the S&P 500 Index which has risen by 4%.
The firm's optimism is based on the anticipation of increasing investor interest due to expected improvements in demand as interest rates gradually decrease. Loop Capital anticipates that these factors will lead to a more favorable long-term margin outlook for Whirlpool. This is in part due to the prediction that costs for raw materials, energy, and logistics will eventually return to more historical norms.
In addition to the expected cost reversion, Loop Capital's valuation reflects an 8x 2024 estimated earnings per share (EPS) and enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). The firm believes that the current valuation mirrors an overstated negative sentiment towards Whirlpool's stock.
Loop Capital's price target of $140.00 suggests a potential upside from the company's current market valuation. The new coverage and price target are aimed at investors who are considering the current market dynamics and Whirlpool's financial prospects. The firm's analysis indicates a belief in the resilience and growth potential of Whirlpool in the face of market fluctuations.
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