Emerging market’s Middle Class is buying more and more appliances. Look no further than Latin America and Brazil where producers and retailers of small to medium sized appliances are booming. Take a look at the chart of Arcelik in Turkey who makes washing machines and cooking appliances, refrigeration, motors, etc. and you will see what’s going on with Turkish middle class.
Whirlpool (WHR, quote) is growing their exposure to those markets. Why Whirlpool?
- December 19th U.S. ruling in appliance dumping claim by WHR against South Korean and Mexican manufacturers gives confidence for Whirlpool that the competitive behavior in North America is now more benign than 12-18 months ago. It’s also interesting to look at LG and Samsung
- Expect upside to consensus EPS expectations from positive margin estimated 200bps of margin progression means they can trade at higher multiple.
- Latin America is 26% sales and growing from 14% 5-7years ago… Emerging Market Middle Class!
- Trades at a premium to its 5yr average P/E (7.5x) but at current P/E of 14X it’s at discount to its peers globally like – Electrolux at 18x and DELonghi at 17.5x