Whirlpool (WHR) is prone to global market and foreign exchange risks as nearly half of its operations are international in nature. Also, high customer concentration and growing competition are major threats to the company.
In addition, inventories are on the rise due to the weak economy, which is forcing the company to reduce its product prices and, therefore, its profit margins. In the most recent quarter, Whirlpool just managed to post earnings in-line with the Zacks Consensus Estimate.
The company is also facing a deteriorating balance sheet with an increased debt balance but reduced cash balance. These factors have led us to provide an Underperform recommendation on Whirlpool with a target price of $68.