Fitch Ratings has lowered Whirlpool Corporation's long-term Issuer Default Rating to BB from BB+. The ratings action also reduced the company's unsecured debt ratings to BB, with the Recovery Rating remaining at RR4 from BB+/RR4. Fitch affirmed Whirlpool's Short-Term IDR and commercial paper ratings, and left Whirlpool Europe B.V.'s commercial paper rating at B. The Rating Outlook accompanying the action is Negative.
Fitch's move reflects its view that Whirlpool's margin recovery will take longer than previously assumed, a dynamic that will keep leverage elevated even after the company raised equity through common stock and a mandatory convertible preferred stock issuance to reduce debt. The agency now expects Whirlpool's EBITDA margins to settle in a narrower, lower range than before - between 7.5% and 8.5% in 2026 and 8% to 9% in 2027. Those forecasts are modestly higher than 2025 levels but fall short of Fitch's earlier projection that margins would settle between 9% and 10% in both 2026 and 2027.
Fitch cited several pressures behind its Negative Outlook. Ongoing weakness in demand, tariff-related headwinds, and continued competitive intensity are central factors. The ratings agency also highlighted commodity and geopolitical risks, noting that higher oil prices and uncertainty stemming from the conflict in Iran add to the outlook's downside.
On leverage, Fitch expects adjusted EBITDA leverage to be roughly 5x at the end of 2026, improving to below 4.5x by year-end 2027. Revenue assumptions incorporate an expectation of flat product demand in 2026 but still forecast organic revenue growth of 3.5% to 4.5%, a result Fitch attributes to meaningful product launches coming in 2025.
Fitch warned that the conflict in Iran could undermine the revenue and margin outlook through multiple channels. The agency pointed to the possibility of higher oil prices feeding renewed inflationary pressures, which in turn could delay Federal Reserve rate cuts and keep 30-year mortgage rates above 6% - outcomes that would weigh on consumer spending and housing-related demand.
Separately, Whirlpool recently raised $1.1 billion from an issuance of preferred stock and common equity. Fitch said the proceeds were used to repay a EUR500 million note maturing in November 2026 and to pay down short-term borrowings.
On cash flow, Fitch projects a free cash flow margin below 1% in 2026, improving to a range of 1.2% to 1.7% in 2027. Those FCF projections assume capital expenditures of 2.5% to 3.0% of revenues and steady dividend payments.
Note: This article reports Fitch Ratings' published assessments and expectations without adding new data or interpretation beyond the agency's stated positions.