WHR
WHR
Accumulate 2026-04-08
Model
DCF
Price at Report
$N/A
Base IV
$481.45
Bear IV
$182.22
Bull IV
$1077.00
Entry Zone: $80-95 (accumulate on dips)
Bore Family Office
Research | DCF Valuation | April 08, 2026
WHR — Whirlpool Corporation
Cyclical Industrials | Appliances & Lighting | Capital Return Focus
|
Current Price
$54.53
|
Intrinsic Value (Base)
$481.45
+782.9% upside
|
| Verdict: Accumulate — Accumulate on weakness below $95; significant upside to base case. | |
Valuation Summary
| Scenario | Intrinsic Value | vs Current |
|---|---|---|
| Bear | $182.22 | +234.2% |
| Base | $481.45 | +782.9% |
| Bull | $1077.00 | +1875.1% |
Analyst Consensus
| Metric | Value |
|---|---|
| Average PT | $103.80 |
| PT Range | $92.00 – $112.00 |
| # Analysts | 12 |
| EPS Growth Exp. (2026E) | +26% YoY (recovery) |
Valuation Methodology: DCF (FCFF)
Model Selection: DCF appropriate for capital-return-focused industrials. WHR is a pure cyclical; dividends are modest, capital returns are driven by share buybacks opportunistically.
Key Inputs:
- FCF Base (FY2025): $900M (~4.5% margin)
- Rf: 4.4% | β: 1.20 | ERP: 5.5%
- Ke: 11.00% | Kd: 3.69% | WACC: 7.14%
- Terminal Growth: 1.5–3.0% (mature industrial)
Business Quality Scorecard
| Dimension | Assessment | Score | |
|---|---|---|---|
| ROIC | 🟡 | 7–9% ROIC (cyclically depressed); normalized 12–14% | 2/4 |
| FCF Margin | 🟡 | 4.5% FCF margin (currently); target 6–7% | 2/4 |
| Debt/EBITDA | 🟡 | 3.5× (elevated); target <3× | 2/4 |
| Revenue Trend | 🔴 | Declining 3yrs; stabilizing in 2026 expected | 0/4 |
| FCF Trend | 🟡 | Volatile; recovering from 2024 lows | 2/4 |
| Total: 8/20 (Weak) — Classic cyclical industrial. Quality metrics depressed by cycle; normalization would improve to 10–12/20. Watch housing cycle and input cost trends. | |||
Investment Thesis
Bull Case:
- Housing recovery: U.S. housing starts rebounding; appliance demand follows; EPS recovery story
- Margin expansion: commodity input costs (steel, copper) normalizing; gross margins recovering 200–300bps
- Capital returns: WHR is aggressive with buybacks at depressed valuations; share count reduction amplifies EPS
- Valuation: trading 15–16× 2026E earnings (cheap vs. industrial avg 18–20×); multiple expansion if recovery validated
Bear Case:
- Housing downturn: U.S. housing demand sensitive to rates; recession could trigger 30–40% unit volume decline
- Margin pressure: input cost inflation, supply chain disruption, or pricing reversion could compress FCF 20–30%
- Leverage: 3.5× debt/EBITDA constrains flexibility in downturn; covenant restrictions on buybacks
- Cyclical valuation trap: trading cheap for a reason; normalized returns (7–10% ROIC) justify modest P/E
Key Assumptions (Base):
- U.S. housing starts stabilize at 1.3–1.5M units annually
- FCF margin recovery to 6–7% by 2027 (vs. 4.5% today)
- Leverage declining toward 2.5× by 2028
- Buyback program continues at $300–400M/yr
Recommendation
ACCUMULATE — Current price $54.53 offers +782.9% upside to base case. Cyclical recovery play; suitable only for investors comfortable with earnings volatility and housing cycle risk. Capital returns (buybacks) and margin recovery are the bull case; downside is meaningful if housing weakens.
Entry Strategy:
- Strong Accumulate: <$80 (20%+ discount to base; maximum safety margin)
- Accumulate: $80–$95 (10–15% upside; housing recovery underway)
- Hold/Reduce: $95–$105 (at/near fair value; lock in gains)
- Sell: >$110 (bull case fully priced; take profits before cycle turns)