Western Digital (NASDAQ:WDC) Stock Price Down 6% - Time to Sell?

Key Points

• WDC shares fell about 6% on Tuesday to roughly $152.74 (intraday low $150.75) on lighter-than-normal volume, after closing the prior session at $162.45.
• Analysts remain mostly positive with a consensus rating of "Moderate Buy" and an average price target of $160.74, while several firms recently raised targets up to $180 and kept buy/overweight calls.
• Western Digital reported last-quarter EPS of $1.78 on $4.10 billion revenue, has a market cap of $53.4 billion and a P/E of 30.34, and recently raised its quarterly dividend to $0.125 (annual $0.50, ~0.3% yield) amid notable insider sales and large institutional buying (institutional ownership ~92.5%).

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares traded down 6% on Tuesday . The company traded as low as $150.75 and last traded at $152.7380. 4,016,425 shares traded hands during mid-day trading, a decline of 52% from the average session volume of 8,378,265 shares. The stock had previously closed at $162.45.

Analysts Set New Price Targets

A number of equities analysts have weighed in on WDC shares. Rosenblatt Securities raised their target price on shares of Western Digital from $125.00 to $165.00 and gave the company a "buy" rating in a research note on Friday, October 31st. The Goldman Sachs Group restated a "neutral" rating and issued a $148.00 price target on shares of Western Digital in a research note on Friday, October 31st. Wedbush lifted their price objective on Western Digital from $90.00 to $135.00 and gave the company an "outperform" rating in a research note on Thursday, October 16th. Wells Fargo & Company boosted their target price on Western Digital from $150.00 to $180.00 and gave the stock an "overweight" rating in a report on Friday, October 31st. Finally, Robert W. Baird set a $180.00 target price on Western Digital in a research note on Friday, October 31st. One research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and five have given a Hold rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $160.74.

Western Digital Trading Down 3.9%

The stock has a fifty day simple moving average of $127.37 and a 200 day simple moving average of $86.63. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.84 and a current ratio of 1.08. The firm has a market cap of $53.40 billion, a P/E ratio of 30.34, a price-to-earnings-growth ratio of 1.14 and a beta of 1.81.

Western Digital (NASDAQ:WDC - Get Free Report) last announced its quarterly earnings results on Monday, April 7th. The data storage provider reported $1.78 earnings per share (EPS) for the quarter. Western Digital had a return on equity of 24.93% and a net margin of 14.13%.The firm had revenue of $4.10 billion for the quarter. On average, research analysts expect that Western Digital Corporation will post 4.89 earnings per share for the current fiscal year.

Western Digital Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 18th. Stockholders of record on Thursday, December 4th will be issued a dividend of $0.125 per share. This represents a $0.50 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date of this dividend is Thursday, December 4th. This is a boost from Western Digital's previous quarterly dividend of $0.10. Western Digital's payout ratio is 7.28%.

Insider Activity at Western Digital

In related news, insider Vidyadhara K. Gubbi sold 11,343 shares of Western Digital stock in a transaction on Thursday, September 4th. The stock was sold at an average price of $90.29, for a total value of $1,024,159.47. Following the completion of the sale, 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 sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Cynthia L. Tregillis sold 14,067 shares of the stock in a transaction dated Friday, August 22nd. The shares were sold at an average price of $74.78, for a total value of $1,051,930.26. Following the completion of the transaction, the insider directly owned 135,351 shares in the company, valued at approximately $10,121,547.78. This represents a 9.41% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 51,565 shares of company stock worth $5,558,681. Company insiders own 0.18% of the company's stock.

Hedge Funds Weigh In On Western Digital

Several institutional investors have recently made changes to their positions in the business. WCM Investment Management LLC bought a new stake in Western Digital during the third quarter valued at approximately $791,317,000. Norges Bank purchased a new position in shares of Western Digital during the 2nd quarter worth $220,680,000. Fred Alger Management LLC grew its position in shares of Western Digital by 4,923.9% during the 3rd quarter. Fred Alger Management LLC now owns 3,407,042 shares of the data storage provider's stock valued at $409,049,000 after acquiring an additional 3,339,225 shares during the period. Soroban Capital Partners LP grew its position in shares of Western Digital by 1,926.3% during the 2nd quarter. Soroban Capital Partners LP now owns 3,061,134 shares of the data storage provider's stock valued at $195,882,000 after acquiring an additional 2,910,062 shares during the period. Finally, Alyeska Investment Group L.P. increased its stake in shares of Western Digital by 130.0% in the 1st 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 in the last quarter. Institutional investors own 92.51% of the company's stock.

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.

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