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Whirlpool Corporation (NYSE:WHR), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$158 at one point, and dropping to the lows of US$133. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Whirlpool's current trading price of US$138 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Whirlpool’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Whirlpool
What Is Whirlpool Worth?
According to my valuation model, Whirlpool seems to be fairly priced at around 5.3% below my intrinsic value, which means if you buy Whirlpool today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $145.63, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Whirlpool’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Whirlpool?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted revenue growth of 2.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Whirlpool, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in WHR’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on WHR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.