Analyst Upgrades Whirlpool Stock After Two-Year Low

Most anlaysts remain bearish, however

Jun 4, 2018 at 9:16 AM
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Shares of home appliance giant Whirlpool Corporation (NYSE:WHR) have had a rough 12 months, falling almost 23% and touching a two-year low of $143.11 on Friday. The stock got a brief shot in the arm back in January after the Trump administration announced tariffs on imported washing machines, but those gains evaporated quickly and the long-term downtrend was resumed -- despite two positive post-earnings performances during that time. WHR is on the rise in pre-market trading today, though, up 2.9% thanks to a rare bull note.

Specifically, Credit Suisse this morning upgraded Whirlpool stock to "outperform" from "neutral," and boosted its price target to $195 from $170. That represents a 34% increase from Friday's close at $145.31. The analyst expects higher appliance prices to lead to better profitability in upcoming quarters. It should be pointed out, however, that this bull note is quite rare from WHR analysts, as only two of six had "buy" ratings coming into today.

Such a move to the upside would be bad news for those who've recently moved in to short the equity, with short interest increasing by almost 51% in the last two reporting periods. As it stands now, it would take more than three sessions for these bears to cover their positions, based on WHR's average daily trading volume.

Prospective options traders may want to take note that WHR's Schaeffer's Volatility Index (SVI) of 23% ranks in just the 25th annual percentile. In other words, there are lower-than-normal volatility expectations being priced into near-term options, suggesting it could be a good time to buy premium.

 

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