Is Whirlpool Stock a Good Buy at its Current Price?

Whirlpool Corporation (NYSE: WHR) has recently experienced significant fluctuations in its stock price on the NYSE, reaching a high of US$158 and dropping to US$133. This raises the question of whether the current trading price of US$138 accurately reflects the value of the mid-cap company, or if the stock is currently undervalued.

According to a valuation model, Whirlpool appears to be fairly priced, with a value around 5.3% below its intrinsic value. This suggests that buying the stock at its current price would be reasonable. However, if the true value of the company is estimated to be $145.63, there may not be much potential for upside from mispricing.

The volatility of Whirlpool’s stock price also indicates the possibility of it sinking lower or rising higher in the future. This is supported by its high beta, which measures how much the stock moves in relation to the market. Therefore, there may be future opportunities to buy the stock at a lower price.

In terms of growth potential, Whirlpool’s revenue is expected to experience relatively muted growth of 2.8% in the next couple of years. This suggests that growth may not be a significant driver for a buying decision in the short term.

For current shareholders, the market seems to have already priced in Whirlpool’s future outlook, with shares trading around fair value. However, it is important to consider other factors, such as the track record of the management team, before making any investment decisions.

As a potential investor, it may not be the optimal time to buy Whirlpool stock given its fair value. However, the positive outlook of the company encourages further examination of other factors such as the strength of its balance sheet to take advantage of potential future price drops.

It is important to note that analyzing a stock involves considering the associated risks. With this in mind, it is advised to be aware of three warning signs before investing in Whirlpool.

Source: Simply Wall St