Shares of Whirlpool Corporation (NYSE: WHR) fell 12% on Tuesday after the home appliance maker posted disappointing second-quarter results and cut its annual dividend nearly in half.
The stock had already plunged over 24% in the year so far.
The Q2 miss prompted Bank of America to downgrade the stock to underperform from neutral, citing weak discretionary demand, increased promotions, and a challenging global environment.
Analyst Rafe Jadrosich also slashed his price target by $30 to $70 per share, suggesting a further downside of nearly 28.5% from current levels.
Earnings miss and weak guidance drive selloff
Whirlpool reported Q2 CY2025 revenue of $3.77 billion, down 5.4% year over year and below analyst estimates of $3.89 billion, a miss of about 3%.
Earnings per share (GAAP) came in at $1.17, falling short of the consensus estimate of $1.58 by 25.8%.
Adjusted EBITDA stood at $284 million, also missing the Street’s forecast of $312.1 million.
Although the company reconfirmed its full-year revenue guidance at $15.8 billion (0.9% above analyst expectations), Wall Street focused on the underwhelming quarterly results and disappointing forward outlook.
Major domestic appliance sales declined year-over-year across all key geographies: North America, Latin America, and Asia.
Operating margin for the quarter was 5.4%, an improvement from 3.3% a year earlier.
However, the company’s free cash flow turned negative at -$63 million, a sharp reversal from the $275 million reported in the same period last year.
Dividend slashed amid financial pressure
Adding to investor concerns, Whirlpool management proposed a reduction in its annual dividend from $7.00 to $3.60 per share.
The move reflects mounting pressure on cash flows and elevated leverage following a weak quarter.
According to Jadrosich, the dividend cut is a signal that management is prioritizing balance sheet stability amid ongoing headwinds.
“Whirlpool has yet to benefit from tariffs on appliance imports despite its favorable US manufacturing footprint,” Jadrosich noted.
He cited two main reasons: retailers and manufacturers stocked up on inventory before tariffs took effect, and foreign competitors appear willing to absorb near-term margin losses to maintain market share.
The analyst warned that if tariffs lead to further industry-wide price increases, Whirlpool could face additional volume pressure in what remains a fragile consumer environment.
Analyst downgrade reflects medium-term concerns
Bank of America’s downgrade reflects concerns over Whirlpool’s near-term growth prospects.
Jadrosich believes slowing discretionary spending, increased promotional activity, and volatility in international markets will continue to weigh on the company’s valuation multiple through 2025.
Despite its sizable North American manufacturing base, Whirlpool has yet to see meaningful benefit from trade policy changes.
The combination of weakening demand and limited pricing power is putting strain on profitability and investor confidence.
With a market capitalization of $5.55 billion, Whirlpool remains a major player in the global appliance industry.
However, Tuesday’s selloff underscores the challenges it faces as macroeconomic headwinds, competitive pressure, and shifting consumer behavior converge to limit upside in the near term.
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