Whirlpool Corp.

Overview Key strengths Key risks One of the largest global appliance manufacturers, with a portfolio of well-known brands. Competes against several large, technologically savvy international rivals, which will require meaningful research and development spending. History of successfully managing input cost and foreign exchange volatility. Reliance on North American market for nearly all profitability. An estimated 55% of sales are driven by replacement demand. Participates in a cyclical industry, with about 45% of sales correlated with home sales and discretionary purchases. 2x reported gross debt to EBITDA leverage target. Potential weak macroeconomic conditions could prevent the company from strengthening credit ratios to levels necessary to maintain the rating. Whirlpool?s extraordinary profit levels during the pandemic, which were supported by solid demand,

...The large appliance industry is returning to prepandemic conditions, which on balance presents opportunities for Whirlpool, notwithstanding economic risks. Whirlpool's extraordinary profit levels during the pandemic, which were supported by solid demand, lack of promotions, and initially low input costs, were not sustainable. Whirlpool now faces more typical conditions and a cautious macroeconomic backdrop. We estimate that promotions in the company's core North American market ramped up to the high-single-digit percent area during the second quarter of 2023. While the segment won about a point of share compared with last year amid flattish industry volume and benefited from acquired InSinkErator profits, its North American operating income declined 31% year over year, though up 6% sequentially. Its consolidated S&P Global Ratings-adjusted EBITDA declined only 20% in the second quarter given better relative performance in other regions. The second quarter of 2022 reflected strong profits,...

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