WHR Could Be Primed for Post-Earnings Upgrades

Whirlpool is expected to report earnings after the close on April 20

Deputy Editor
Apr 20, 2021 at 3:32 PM
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Appliance manufacturer Whirlpool Corporation (NYSE:WHR) is taking an afternoon breather, down 0.1% at $232.95 at last check. Earlier though, the security hit a fresh all-time high of $240.50, pushing past pressure at the $238 region, which has kept WHR at flat for the better part of April. Today's fresh peak comes just ahead of the company's first-quarter earnings report, which is due out after the close tomorrow, April 21. 

Should Whirlpool report favorable results, a round of bull notes could be just on the horizon. Despite recent positive price action on the charts (the equity has tacked on 134.5% in the last 12 months alone, with considerable support from its 10- and 20-day moving averages), just one of the five analysts in coverage consider it a "strong buy," while the other four say "hold." What's more, the 12-month consensus price target of  $224.40 is a 4.5% discount to current levels. 

An unwinding of pessimism in the options pits could also put some more wind in WHR's sails. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 5.18 WHR puts have been picked up for every call during the past two weeks. This ratio stands higher than all but 4% of readings in its annual range, suggesting an unusually large appetite for puts of late. 

Short sellers, meanwhile, are starting to jump ship, but WHR could still benefit from a short squeeze. The 4.29 million shares sold short make up 7% of the stock's available float, and would take almost six days to cover at its average daily pace of trading. 

While Whirlpool stock suffered an 8.4% drop the session following its latest earnings report in January, the stock's next-day returns have been mostly positive over the past two years. The security has averaged a post-earnings swing of 3.7%, regardless of  direction, though this time around, the options pits are pricing in a much larger 8.2% move. 

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