Sears Breakup Rocks Whirlpool Stock; HNI Set to Sink

After selling off on Monday on rival Hasbro's disappointing holiday sales forecast, MAT was hit with a bearish brokerage note

Oct 24, 2017 at 9:30 AM
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Analysts are weighing in on home appliance stock Whirlpool Corporation (NYSE:WHR), office furniture specialist HNI Corp (NYSE:HNI), and Hasbro rival Mattel, Inc. (NASDAQ:MAT). Here's a quick roundup of today's bearish brokerage notes on shares of WHR, HNI, and MAT.

Whirlpool Stock Gets Downgraded After Earnings, Sears Shakeup

Whirlpool stock is bracing for a 10% drop out of the gate, after the company said its appliances will no longer be sold at Sears Holdings Corp (SHLD) stores -- ending a 100-year partnership -- due to a pricing dispute. What's more, Whirlpool reported third-quarter earnings that were lower than the consensus forecast, and downwardly revised its full-year profit forecast.

Analysts have been quick to weigh in, too. RBC, for instance, cut WHR to "sector perform" from "top pick," while BofA-Merrill Lynch followed suit with a downgrade to "neutral" from "buy." Both brokerage firms also joined Credit Suisse in cutting their price targets on the shares.

With the security headed toward levels not seen since early April, more bearish brokerage notes could be on the horizon. Ahead of last night's earnings report, four of the seven analysts following WHR stock maintained a "strong buy" rating, with not a single "sell" to be found. Plus, the average 12-month price target of $194.11 stood at a 6.4% premium to Monday's close at $182.50.

Raymond James Downgrades HNI Stock After Earnings

HNI shares are down 24.3% in electronic trading -- set to open the session in territory not seen since February 2016 -- after the retailer offered up a disappointing current-quarter forecast following a third-quarter beat. A downgrade to "market perform" from "outperform" at Raymond James is only pouring salt on the proverbial wound, and a round of price-target cuts is likely. In fact, despite the stock's 24.4% year-to-date deficit, the consensus 12-month price target on HNI stock is docked at $45.50 -- a 7.6% premium to last night's close at $42.29, and a level not traded above since before an early June bear gap.

Mattel Stock Hit With PT Cut Amid Hasbro Headwinds

MKM Partners cut its fair value estimate on Mattel stock to $17 from $19, after the shares sold off yesterday on rival Hasbro's holiday sales forecast. Specifically, MAT shares shed 3.2% on Monday to settle at $15.46. This was just more of the same for the toy stock, though, which is down 43.9% year-to-date, and not far removed from a Sept. 25 eight-year low of $14.35.

Part of this downside has likely been due to steady selling pressure from shorts. Short interest on MAT has more than tripled since mid-June to 63.07 million shares -- the most since last December. These bearish bettors could be hoping for a repeat of history. Mattel is scheduled to report earnings after the market closes on Thursday, Oct. 26, and the stock has closed lower in the session subsequent to reporting in three of the past four quarters.

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