Western Digital (NASDAQ:WDC) Downgraded to "Hold" Rating by Summit Insights

Key Points

• Summit Insights downgraded Western Digital to “Hold” from “Buy,” despite the broader analyst consensus remaining “Moderate Buy” with an average price target of $530.92.
• Western Digital reported stronger-than-expected quarterly results, with EPS of $3.56 versus the $3.31 estimate and revenue of $3.75 billion, up 43.8% year over year.
• The stock traded down 5.4% as investors viewed forward guidance as underwhelming relative to elevated AI-growth expectations, even though management cited storage agreements with AI customers extending through 2031.

Western Digital (NASDAQ:WDC - Get Free Report) was downgraded by equities researchers at Summit Insights from a "buy" rating to a "hold" rating in a note issued to investors on Thursday.

A number of other brokerages have also recently issued reports on WDC. Weiss Ratings upgraded Western Digital from a "buy (b-)" rating to a "buy (b)" rating in a research note on Monday, July 13th. Barclays increased their target price on shares of Western Digital from $450.00 to $620.00 and gave the stock an "overweight" rating in a research report on Wednesday, May 27th. TD Cowen lifted their target price on shares of Western Digital from $325.00 to $500.00 and gave the stock a "buy" rating in a research note on Friday, May 1st. Wall Street Zen raised shares of Western Digital from a "hold" rating to a "buy" rating in a research report on Saturday, May 2nd. Finally, Robert W. Baird upped their price target on shares of Western Digital from $310.00 to $450.00 and gave the company an "outperform" rating in a research note on Monday, May 4th. Two research analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $530.92.

Western Digital Trading Down 5.4%

Western Digital stock opened at $519.17 on Thursday. Western Digital has a 12 month low of $73.14 and a 12 month high of $799.87. The business's 50 day simple moving average is $569.14 and its 200 day simple moving average is $415.61. The company has a market cap of $178.95 billion, a price-to-earnings ratio of 31.00 and a beta of 2.14.

Western Digital (NASDAQ:WDC - Get Free Report) last released its earnings results on Tuesday, August 4th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $3.31 by $0.25. The business had revenue of $3.75 billion during the quarter, compared to the consensus estimate of $3.70 billion. Western Digital had a return on equity of 42.95% and a net margin of 55.29%.The business's revenue for the quarter was up 43.8% on a year-over-year basis. During the same period last year, the business posted $1.66 earnings per share. As a group, equities research analysts forecast that Western Digital will post 9.61 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Western Digital news, insider Cynthia L. Tregillis sold 808 shares of the company's stock in a transaction dated Tuesday, July 21st. The stock was sold at an average price of $529.63, for a total value of $427,941.04. Following the transaction, the insider directly owned 114,539 shares in the company, valued at $60,663,290.57. This represents a 0.70% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 2,475 shares of the firm's stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $556.24, for a total value of $1,376,694.00. Following the completion of the sale, the insider directly owned 85,154 shares in the company, valued at approximately $47,366,060.96. The trade was a 2.82% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 5,093 shares of company stock worth $2,751,337. Corporate insiders own 0.18% of the company's stock.

Institutional Investors Weigh In On Western Digital

Several hedge funds have recently bought and sold shares of the stock. Norges Bank bought a new position in shares of Western Digital during the 4th quarter valued at $788,729,000. Soroban Capital Partners LP lifted its stake in Western Digital by 1,926.3% in the second quarter. Soroban Capital Partners LP now owns 3,061,134 shares of the data storage provider's stock worth $195,882,000 after purchasing an additional 2,910,062 shares during the last quarter. Polar Capital Holdings Plc bought a new stake in Western Digital in the third quarter worth $221,800,000. Value Aligned Research Advisors LLC purchased a new stake in Western Digital during the first quarter valued at about $350,403,000. Finally, National Pension Service boosted its position in Western Digital by 267.6% during the fourth quarter. National Pension Service now owns 1,691,659 shares of the data storage provider's stock valued at $291,422,000 after buying an additional 1,231,477 shares during the period. 92.51% of the stock is currently owned by institutional investors.

Trending Headlines about Western Digital

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

• Positive Sentiment: Western Digital reported adjusted fourth-quarter EPS of $3.56, above the $3.31 consensus estimate, while revenue increased 43.8% year over year to $3.75 billion, also exceeding expectations. Profit more than11-fold from the prior-year quarter. Western Digital Q4 Earnings and Revenues Top Estimates
• Positive Sentiment: Management said AI customers are negotiating storage capacity agreements extending through 2031, suggesting strong long-term visibility for hard-drive demand tied to data-center expansion. Western Digital Says AI Customers Are Negotiating Storage Deals Through 2031
• Positive Sentiment: Robert W. Baird maintained a Buy rating and raised its price target to $630 from $450, citing AI-supported HDD strength and improving profitability. Western Digital Earns Buy Rating as Analyst Lifts Price Target
• Neutral Sentiment: Western Digital declared a quarterly dividend of $0.15 per share, payable September 17 to shareholders of record September 8. The approximately 0.1% yield is unlikely to be a major share-price catalyst.
• Negative Sentiment: First-quarter fiscal 2027 guidance calls for EPS of $3.85–$4.15 and revenue of $4.0–$4.2 billion, both above published consensus estimates. However, investors viewed the outlook as disappointing relative to elevated expectations for AI-related growth, triggering declines across storage stocks including SanDisk and Western Digital. Sandisk and Western Digital Drag on Chip Stocks as Lofty Expectations Eclipse Strong Earnings

Western Digital Company Profile

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.

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