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Whirlpool to dump its Russian business for deferred payments; What’s next for WHR stock?

Whirlpool to dump its Russian business for deferred payments; What’s next for WHR stock
Dino
Kurbegovic
2 months ago
2 mins read

On June 28, 2022, Whirlpool Corporation (NYSE: WHR) apparently agreed to sell its Russian operation for deferred payments. Namely, the buyer of the operation is Arçelik A.S. which will pay a sum of €220 million ($321.2 million) over 10 years, taking over also the manufacturing site in Lipetsk and in Moscow.  

Further, the transaction will be subject to business conditions as well as getting regulatory approval for the finalization of the sales, which is expected to be closed in Q3 of 2022. Meanwhile, Whirlpool expects to record a $300 to $400 million loss during Q2 due to this transaction.

The final amount of the loss will be subject to changes in working capital accounts, divesture-related costs, and impacts of foreign currency exchange rates. 

WHR chart and analysis

In short, 2022 was not a good year for WHR shares, staying in a downward momentum with occasional trading volume spikes. In the recent trading session, shares closed below the 20-day Simple Moving Average (SMA), with the stock losing 1.74% due to the news of the business divestiture in Russia. 

Shares are seemingly whipsawing between the $145 level, a new support line, and the $170 level, a new possible resistance line.

WHR 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Moreover, analysts remain split on the shares, with two each having a buy, a hold, and a sell rating, making up the rating consensus of hold. Further, for the next 12 months, the average price the analysts see is $185.67, 15.30% higher than the current trading price of $161.03.

Wall Street WHR analysts’ price targets for WHR. Source: TipRanks

Finally, the news of the business divesture did not rock the share price of WHR too much as the shares lost over 30% year-to-date (YTD), with the market seemingly pricing in some shocks into the current trading range.

In addition, western businesses are leaving Russia in a hurry racking up losses for both their companies and the shareholder base, which hardly could have predicted such a turn of events.  

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Dino Kurbegovic
Author

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.