Western Digital (NASDAQ:WDC) Reaches New 1-Year High - Still a Buy?

Key Points

• Western Digital's shares reached a new 52-week high of $85.75, as the stock traded at $84.81 with over 1.16 million shares changing hands.
• Analyst upgrades have been frequent, with Wells Fargo raising their target price to $95.00 and several firms affirming a "buy" rating, contributing to a consensus target of $78.39.
• The company recently announced a quarterly dividend payment of $0.10 per share and approved a stock buyback plan to repurchase up to $2.00 billion in shares.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares hit a new 52-week high on Wednesday . The company traded as high as $85.75 and last traded at $84.81, with a volume of 1160912 shares changing hands. The stock had previously closed at $81.91.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently weighed in on WDC shares. UBS Group upped their target price on Western Digital from $45.00 to $75.00 and gave the company a "neutral" rating in a report on Monday, July 21st. Rosenblatt Securities upped their target price on Western Digital from $53.00 to $90.00 and gave the company a "buy" rating in a report on Thursday, July 31st. Benchmark upped their target price on Western Digital from $58.00 to $85.00 and gave the company a "buy" rating in a report on Thursday, July 31st. The Goldman Sachs Group initiated coverage on Western Digital in a report on Thursday, July 10th. They issued a "neutral" rating and a $70.00 target price on the stock. Finally, Barclays boosted their price target on Western Digital from $50.00 to $80.00 and gave the company an "overweight" rating in a research note on Friday, August 1st. One research analyst has rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and three have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $79.28.

Western Digital Stock Up 1.7%

The company has a quick ratio of 0.84, a current ratio of 1.08 and a debt-to-equity ratio of 0.47. The company has a market capitalization of $32.11 billion, a P/E ratio of 17.87, a PEG ratio of 1.11 and a beta of 1.69. The firm has a 50-day moving average price of $73.24 and a two-hundred day moving average price of $55.94.

Western Digital (NASDAQ:WDC - Get Free Report) last posted its quarterly earnings data on Wednesday, July 30th. The data storage provider reported $1.66 earnings per share for the quarter, beating the consensus estimate of $1.48 by $0.18. Western Digital had a return on equity of 24.93% and a net margin of 14.13%.The company had revenue of $2.61 billion during the quarter, compared to analysts' expectations of $2.45 billion. During the same period in the prior year, the business earned $1.44 earnings per share. Western Digital's revenue for the quarter was up 30.0% compared to the same quarter last year. Western Digital has set its Q1 2026 guidance at 1.540-1.690 EPS. Equities research analysts anticipate that Western Digital Corporation will post 4.89 EPS for the current fiscal year.

Western Digital Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 18th. Investors of record on Thursday, September 4th will be paid a $0.10 dividend. This represents a $0.40 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date is Thursday, September 4th. Western Digital's dividend payout ratio is presently 7.77%.

Western Digital declared that its Board of Directors has approved a share repurchase plan on Tuesday, May 13th that permits the company to repurchase $2.00 billion in shares. This repurchase authorization permits the data storage provider to purchase up to 11.7% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company's management believes its stock is undervalued.

Insider Transactions at Western Digital

In related news, CEO Irving Tan sold 8,621 shares of the company's stock in a transaction on Tuesday, August 19th. The stock was sold at an average price of $75.90, for a total value of $654,333.90. Following the completion of the transaction, the chief executive officer directly owned 594,836 shares in the company, valued at approximately $45,148,052.40. This represents a 1.43% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Vidyadhara K. Gubbi sold 11,343 shares of the company's stock in a transaction on Thursday, September 4th. The shares were sold at an average price of $90.29, for a total value of $1,024,159.47. Following the completion of the transaction, the insider owned 151,596 shares of the company's stock, valued at $13,687,602.84. The trade was a 6.96% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 49,975 shares of company stock valued at $3,935,806. Company insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Vanguard Group Inc. grew its holdings in shares of Western Digital by 1.1% during the first quarter. Vanguard Group Inc. now owns 42,938,495 shares of the data storage provider's stock worth $1,736,003,000 after purchasing an additional 478,728 shares during the last quarter. Geode Capital Management LLC grew its holdings in shares of Western Digital by 2.0% during the second quarter. Geode Capital Management LLC now owns 9,305,289 shares of the data storage provider's stock worth $593,045,000 after purchasing an additional 186,030 shares during the last quarter. Holocene Advisors LP grew its holdings in shares of Western Digital by 8.5% during the second quarter. Holocene Advisors LP now owns 5,535,972 shares of the data storage provider's stock worth $354,247,000 after purchasing an additional 431,419 shares during the last quarter. Alyeska Investment Group L.P. grew its holdings in shares of Western Digital by 130.0% during the first quarter. Alyeska Investment Group L.P. now owns 5,029,359 shares of the data storage provider's stock worth $203,337,000 after purchasing an additional 2,842,822 shares during the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its holdings in shares of Western Digital by 23.7% during the fourth quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 4,592,516 shares of the data storage provider's stock worth $273,852,000 after purchasing an additional 881,088 shares during the last quarter. 92.51% of the stock is currently owned by institutional investors and hedge funds.

About Western Digital

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications.