Western Digital (NASDAQ:WDC) Shares Down 1.8% on Analyst Downgrade

Key Points

• Western Digital shares fell 1.8% after Fox Advisors downgraded the stock from Overweight to Equal Weight, though trading volume was well above average.
• Despite the downgrade, the broader analyst picture remains positive, with several firms recently raising price targets and the consensus rating still at Moderate Buy.
• The company has also posted strong operating results, including a quarterly earnings beat and a higher dividend, while insider selling and warnings that the stock is overbought could limit near-term upside.

Western Digital Corporation (NASDAQ:WDC - Get Free Report)'s stock price fell 1.8% during mid-day trading on Monday after Fox Advisors downgraded the stock from an overweight rating to an equal weight rating. The company traded as low as $726.60 and last traded at $732.62. Approximately 13,052,192 shares were traded during mid-day trading, an increase of 45% from the average session volume of 8,976,504 shares. The stock had previously closed at $746.23.

WDC has been the subject of several other research reports. JPMorgan Chase & Co. increased their price target on Western Digital from $530.00 to $650.00 and gave the company an "overweight" rating in a report on Friday, June 12th. Cantor Fitzgerald boosted their price objective on Western Digital to $660.00 and gave the stock an "overweight" rating in a research note on Friday, May 1st. Robert W. Baird raised their target price on Western Digital from $310.00 to $450.00 and gave the stock an "outperform" rating in a research note on Monday, May 4th. Evercore reiterated an "outperform" rating and set a $575.00 price target on shares of Western Digital in a report on Tuesday, May 26th. Finally, Citigroup boosted their price target on shares of Western Digital from $500.00 to $685.00 and gave the company a "buy" rating in a research report on Tuesday, June 2nd. One research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and four have given a Hold rating to the stock. Based on data from MarketBeat, Western Digital currently has a consensus rating of "Moderate Buy" and an average target price of $450.46.

Insiders Place Their Bets

In other news, insider Vidyadhara K. Gubbi sold 4,674 shares of the stock in a transaction on Monday, May 4th. The stock was sold at an average price of $443.19, for a total transaction of $2,071,470.06. Following the completion of the transaction, the insider directly owned 90,041 shares in the company, valued at approximately $39,905,270.79. This represents a 4.93% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Irving Tan sold 20,000 shares of the firm's stock in a transaction dated Friday, May 1st. The stock was sold at an average price of $411.84, for a total value of $8,236,800.00. Following the sale, the chief executive officer directly owned 598,150 shares of the company's stock, valued at $246,342,096. The trade was a 3.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 29,322 shares of company stock valued at $12,768,550. 0.18% of the stock is currently owned by insiders.

Western Digital News Roundup

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

• Positive Sentiment: Western Digital is benefiting from a sector-wide surge in memory and storage names, with traders buying ahead of Micron’s upcoming earnings and betting that AI-related demand will keep boosting the group. Article Title
• Positive Sentiment: JPMorgan raised its price target on Western Digital to $650 from $530 and maintained an Overweight rating, citing higher earnings forecasts. Article Title
• Positive Sentiment: Recent commentary highlighted Western Digital’s strong revenue growth and its role as a key hard-disk and storage supplier for AI infrastructure, which is helping keep investor sentiment constructive. Article Title
• Neutral Sentiment: Western Digital remains a heavily watched momentum name, with Zacks noting unusual investor attention rather than a specific new catalyst. Article Title
• Negative Sentiment: Fox Advisors downgraded Western Digital from Overweight to Equal Weight, which may temper some of the bullish momentum. Article Title
• Negative Sentiment: One technical note warned the shares are extremely overbought, suggesting the stock could be vulnerable to a pullback after its strong run. Article Title

Institutional Investors Weigh In On Western Digital

A number of institutional investors have recently made changes to their positions in WDC. Rakuten Securities Inc. grew its stake in shares of Western Digital by 4,070.0% in the second quarter. Rakuten Securities Inc. now owns 417 shares of the data storage provider's stock worth $27,000 after acquiring an additional 407 shares in the last quarter. Avion Wealth raised its stake in shares of Western Digital by 163.8% in the fourth quarter. Avion Wealth now owns 182 shares of the data storage provider's stock valued at $31,000 after acquiring an additional 113 shares in the last quarter. Valley Wealth Managers Inc. purchased a new position in Western Digital in the first quarter valued at $32,000. Swiss RE Ltd. purchased a new position in Western Digital in the fourth quarter valued at $32,000. Finally, BOKF NA grew its stake in Western Digital by 6,700.0% during the 3rd quarter. BOKF NA now owns 272 shares of the data storage provider's stock worth $33,000 after purchasing an additional 268 shares in the last quarter. 92.51% of the stock is currently owned by institutional investors and hedge funds.

Western Digital Stock Performance

The company has a 50 day moving average of $487.12 and a 200 day moving average of $328.32. The stock has a market capitalization of $252.52 billion, a price-to-earnings ratio of 43.74 and a beta of 2.13.

Western Digital (NASDAQ:WDC - Get Free Report) last posted its quarterly earnings results on Thursday, April 30th. The data storage provider reported $2.72 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.39 by $0.33. Western Digital had a return on equity of 42.95% and a net margin of 55.29%.The company had revenue of $3.34 billion for the quarter, compared to analyst estimates of $3.25 billion. During the same quarter last year, the company earned $1.36 EPS. Western Digital's revenue for the quarter was up 45.5% compared to the same quarter last year. Western Digital has set its Q4 2026 guidance at 3.100-3.400 EPS. As a group, research analysts expect that Western Digital Corporation will post 9.6 EPS for the current fiscal year.

Western Digital Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Wednesday, June 17th. Investors of record on Friday, June 5th were paid a dividend of $0.15 per share. The ex-dividend date was Friday, June 5th. This is an increase from Western Digital's previous quarterly dividend of $0.12. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. Western Digital's payout ratio is presently 3.58%.

About Western Digital

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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