Whirlpool's rating downgraded to BB by Fitch due to slower-than-expected profit margin recovery

LootboxPhobia · 2026-03-27T05:43:54+00:00

Fitch Ratings downgraded Whirlpool's long-term default rating to BB, reflecting a prolonged recovery period for profit margins and high leverage. Despite recent debt reduction efforts, weak demand and competitive pressures continue to impact profit outlook. EBITDA leverage is expected to reach 5x by 2026, with revenue growth threatened by the Iran conflict and rising oil prices.

LootboxPhobia

2026-03-27 05:43:54

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Investing.com - Fitch Ratings today downgraded Whirlpool Corporation’s (NYSE:WHR) long-term issuer default rating from BB+ to BB and downgraded the company’s unsecured debt rating to BB, while maintaining the recovery rating at RR4, previously BB+/RR4. The rating agency confirmed Whirlpool’s short-term issuer default rating and commercial paper rating, as well as Whirlpool Europe Ltd.'s commercial paper rating, at B. The rating outlook is negative.

This downgrade reflects Fitch’s expectation that the recovery of profit margins will take longer than anticipated; although Whirlpool recently issued common stock and mandatory convertible preferred stock to reduce debt, leverage will remain high. Fitch expects EBITDA margins to stabilize between 7.5%-8.5% in 2026 and between 8%-9% in 2027, slightly above 2025 levels but below Fitch’s previous expectations that 2026 and 2027 margins would stabilize between 9%-10%.

The negative outlook reflects ongoing pressure on margins from a weak demand environment, tariff impacts, and sustained competitive pressures. The uncertainty of the potential impact of rising oil prices and ongoing conflicts in Iran also affects the outlook. Fitch expects EBITDA leverage to reach about 5 times by the end of 2026 and to fall below 4.5 times by the end of 2027.

Fitch anticipates that demand for Whirlpool products will be flat in 2026, but forecasts revenue will achieve organic growth of 3.5%-4.5%, primarily driven by significant product launches in 2025. The conflict in Iran threatens this outlook through various mechanisms, including inflation risks triggered by rising oil prices, which could delay rate cuts by the Federal Reserve and keep 30-year mortgage rates above 6%.

Whirlpool recently raised $1.1 billion through the issuance of preferred stock and common stock to repay €500 million of notes maturing in November 2026 and short-term debt. Fitch expects free cash flow margins to be below 1% in 2026 and between 1.2%-1.7% in 2027, assuming capital expenditures are 2.5%-3.0% of revenue and dividends remain stable.

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