Western Digital (NASDAQ:WDC) Trading 9.6% Higher - Still a Buy?

Key Points

• Western Digital shares jumped 9.6% on Tuesday to as high as $314.92 (last $313.81) with volume up about 39% to ~13.9 million shares, well above the prior close of $286.21.
• The company posted an earnings beat—Q1 EPS $2.13 vs. $1.93 expected and revenue $3.02B vs. $2.93B—with revenue up 25.2% year‑over‑year and strong margins and ROE.
• Analysts and institutions are largely bullish: MarketBeat shows a consensus Moderate Buy (consensus target $265.58) with several firms raising targets (Citigroup $325, Truist $310) and large institutional inflows, although insiders have recently trimmed small positions.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares were up 9.6% during trading on Tuesday . The stock traded as high as $314.92 and last traded at $313.81. Approximately 13,915,653 shares were traded during trading, an increase of 39% from the average daily volume of 10,041,928 shares. The stock had previously closed at $286.21.

Analysts Set New Price Targets

WDC has been the subject of a number of recent analyst reports. Weiss Ratings raised shares of Western Digital from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Monday, February 2nd. Truist Financial set a $310.00 price objective on shares of Western Digital in a research note on Tuesday, February 3rd. Citigroup increased their price objective on shares of Western Digital to $325.00 and gave the stock a "buy" rating in a research report on Monday, February 2nd. Susquehanna reissued a "neutral" rating and set a $285.00 target price on shares of Western Digital in a research note on Friday, February 6th. Finally, The Goldman Sachs Group set a $250.00 target price on shares of Western Digital in a report on Tuesday, February 3rd. One analyst has rated the stock with a Strong Buy rating, twenty have issued a Buy rating and three have issued a Hold rating to the company's stock. According to data from MarketBeat, Western Digital presently has a consensus rating of "Moderate Buy" and a consensus target price of $265.58.

Western Digital Trading Up 9.6%

The stock has a market cap of $106.39 billion, a PE ratio of 31.48, a PEG ratio of 0.63 and a beta of 1.75. The company has a quick ratio of 1.19, a current ratio of 1.46 and a debt-to-equity ratio of 0.34. The stock's fifty day moving average price is $257.20 and its 200 day moving average price is $181.26.

Western Digital (NASDAQ:WDC - Get Free Report) last released its quarterly earnings data on Thursday, January 29th. The data storage provider reported $2.13 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.93 by $0.20. The business had revenue of $3.02 billion for the quarter, compared to analysts' expectations of $2.93 billion. Western Digital had a return on equity of 41.53% and a net margin of 35.52%.The firm's quarterly revenue was up 25.2% on a year-over-year basis. During the same period in the prior year, the firm posted $1.77 EPS. On average, sell-side analysts forecast that Western Digital Corporation will post 4.89 EPS for the current year.

Western Digital Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, March 18th. Stockholders of record on Thursday, March 5th will be issued a dividend of $0.125 per share. This represents a $0.50 annualized dividend and a dividend yield of 0.2%. The ex-dividend date of this dividend is Thursday, March 5th. Western Digital's payout ratio is presently 5.02%.

Insider Activity at Western Digital

In related news, insider Cynthia L. Tregillis sold 9,324 shares of the firm's stock in a transaction that occurred on Wednesday, March 4th. The shares were sold at an average price of $268.27, for a total value of $2,501,349.48. Following the sale, the insider owned 121,682 shares in the company, valued at approximately $32,643,630.14. This trade represents a 7.12% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider Vidyadhara K. Gubbi sold 10,148 shares of the business's stock in a transaction on Wednesday, March 4th. The shares were sold at an average price of $270.31, for a total transaction of $2,743,105.88. Following the sale, the insider owned 107,794 shares of the company's stock, valued at approximately $29,137,796.14. This represents a 8.60% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 92,795 shares of company stock worth $24,265,884 in the last three months. 0.18% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of the company. WCM Investment Management LLC bought a new stake in Western Digital during the third quarter valued at approximately $791,317,000. Norges Bank bought a new position in Western Digital in the fourth quarter worth approximately $788,729,000. Fred Alger Management LLC raised its position in Western Digital by 4,923.9% in the third quarter. Fred Alger Management LLC now owns 3,407,042 shares of the data storage provider's stock worth $409,049,000 after acquiring an additional 3,339,225 shares during the period. Soroban Capital Partners LP boosted its stake 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 worth $195,882,000 after acquiring an additional 2,910,062 shares during the last quarter. Finally, Polar Capital Holdings Plc bought a new stake in shares of Western Digital during the 3rd quarter valued at $221,800,000. 92.51% of the stock is owned by hedge funds and other institutional investors.

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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