Western Digital (NASDAQ:WDC) Upgraded at Zacks Research

Key Points

• Zacks Research upgraded Western Digital from “hold” to “strong buy.” Across analysts, the stock has a “Moderate Buy” consensus rating and an average price target of $591.04.
• Western Digital beat quarterly expectations, reporting adjusted earnings of $4.64 per share versus $4.11 expected and revenue of $4.38 billion, up 55.5% year over year.
• Shares opened down 6.8% at $323.83. Investors face potential headwinds from valuation and execution risks around the company’s hard-drive technology roadmap, despite demand tied to cloud and AI storage.

Western Digital (NASDAQ:WDC - Get Free Report) was upgraded by investment analysts at Zacks Research from a "hold" rating to a "strong-buy" rating in a research note issued to investors on Tuesday, Zacks reports.

A number of other equities research analysts have also recently issued reports on the stock. Cantor Fitzgerald dropped their target price on shares of Western Digital from $900.00 to $625.00 and set an "overweight" rating on the stock in a report on Friday, October 23rd. Sanford C. Bernstein upped their price objective on Western Digital from $590.00 to $770.00 and gave the company an "outperform" rating in a research note on Thursday, August 6th. The Goldman Sachs Group set a $540.00 price objective on Western Digital in a research report on Friday, October 23rd. Wells Fargo & Company reduced their target price on Western Digital from $730.00 to $450.00 and set an "overweight" rating for the company in a research note on Friday, October 16th. Finally, Mizuho set a $490.00 target price on Western Digital in a research note on Friday, October 23rd. Two research analysts have rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat, Western Digital currently has an average rating of "Moderate Buy" and a consensus price target of $591.04.

Western Digital Trading Down 6.8%

Shares of WDC opened at $323.83 on Tuesday. The company's fifty day simple moving average is $414.74 and its 200 day simple moving average is $418.54. Western Digital has a 1-year low of $132.43 and a 1-year high of $799.87. The company has a market cap of $121.22 billion, a price-to-earnings ratio of 12.57, a PEG ratio of 1.23 and a beta of 2.27.

Western Digital (NASDAQ:WDC - Get Free Report) last announced its quarterly earnings results on Thursday, October 22nd. The data storage provider reported $4.64 EPS for the quarter, beating analysts' consensus estimates of $4.11 by $0.53. Western Digital had a net margin of 69.20% and a return on equity of 55.62%. The firm had revenue of $4.38 billion during the quarter, compared to analysts' expectations of $4.14 billion. During the same quarter last year, the company posted $1.78 earnings per share. The company's revenue for the quarter was up 55.5% compared to the same quarter last year. As a group, research analysts forecast that Western Digital will post 23.62 earnings per share for the current year.

Insiders Place Their Bets

In other news, insider Vidyadhara Gubbi sold 1,795 shares of Western Digital stock in a transaction on Friday, September 4th. The stock was sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the sale, the insider owned 80,571 shares of the company's stock, valued at approximately $37,052,185.77. This trade represents a 2.18% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Cynthia Tregillis sold 1,007 shares of the firm's stock in a transaction dated Thursday, August 27th. The stock was sold at an average price of $478.36, for a total transaction of $481,708.52. Following the transaction, the insider directly owned 112,155 shares in the company, valued at approximately $53,650,465.80. This represents a 0.89% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 25,436 shares of company stock worth $11,340,064 in the last 90 days. Company insiders own 0.20% of the company's stock.

Institutional Investors Weigh In On Western Digital

A number of hedge funds and other institutional investors have recently made changes to their positions in WDC. Legal & General Group Plc bought a new stake in shares of Western Digital during the second quarter valued at approximately $1,602,927,000. Anther Capital Ltd bought a new position in shares of Western Digital in the 2nd quarter worth $901,601,000. Deutsche Bank AG bought a new position in shares of Western Digital in the 2nd quarter worth $885,565,000. Value Aligned Research Advisors LLC acquired a new stake in Western Digital in the 1st quarter valued at $350,403,000. Finally, Renaissance Technologies LLC grew its position in Western Digital by 15.5% in the 1st quarter. Renaissance Technologies LLC now owns 1,146,133 shares of the data storage provider's stock valued at $310,018,000 after purchasing an additional 153,600 shares during the period. 92.51% of the stock is currently owned by institutional investors and hedge funds.

Key Western Digital News

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital’s latest earnings beat expectations, and its second-quarter outlook points to further margin growth. Strong pricing, demand for higher-capacity hard drives, and cloud and AI storage needs are cited as key supports. Western Digital’s Q1 beat and Q2 outlook
• Neutral Sentiment: Some analysts view the recent pullback as a potential buying opportunity given earnings growth and cloud demand, though opinions are tempered by risks. Is the dip a buying opportunity?
• Negative Sentiment: Storage and memory shares sold off amid concerns about memory pricing and uncertainty around the U.S. election, even as the broader tech market rallied. Cautious commentary from a flash-memory maker also pressured the group, with concerns spilling over to WDC despite its hard-drive focus. Sector pressure from election and memory-price worries
• Negative Sentiment: Investors are also weighing WDC’s premium valuation and the risk of executing its HAMR hard-drive technology roadmap, which could limit confidence despite strong results. Valuation and execution risks

About Western Digital

Western Digital Corporation NASDAQ: WDC is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.

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