Western Digital (NASDAQ:WDC) Trading Down 8.4% Following Analyst Downgrade

Key Points

• Western Digital shares fell 8.4% after Fox Advisors downgraded the stock from overweight to equal weight. The stock traded as low as $653 and saw volume well above average.
• Despite the selloff, multiple other analysts remain bullish, with recent target hikes from firms like Barclays, Cantor Fitzgerald, Morgan Stanley, and Wells Fargo. MarketBeat data still shows a Moderate Buy consensus rating.
• The company’s latest earnings were strong, beating expectations on both profit and revenue, and Western Digital also raised its quarterly dividend to $0.15 per share. Insiders have also been selling shares, including CEO Irving Tan.

Western Digital Corporation (NASDAQ:WDC - Get Free Report)'s stock price traded down 8.4% on Tuesday after Fox Advisors downgraded the stock from an overweight rating to an equal weight rating. The company traded as low as $653.00 and last traded at $670.75. Approximately 12,473,982 shares were traded during mid-day trading, an increase of 39% from the average session volume of 8,983,244 shares. The stock had previously closed at $732.62.

A number of other analysts have also commented on the stock. Barclays upped their price objective on shares of Western Digital from $450.00 to $620.00 and gave the company an "overweight" rating in a research note on Wednesday, May 27th. Cantor Fitzgerald lifted their target price on shares of Western Digital to $660.00 and gave the stock an "overweight" rating in a research report on Friday, May 1st. Morgan Stanley boosted their price target on shares of Western Digital from $488.00 to $650.00 and gave the company an "overweight" rating in a report on Monday, June 15th. Zacks Research upgraded shares of Western Digital from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, May 6th. Finally, Wells Fargo & Company raised their price objective on shares of Western Digital from $500.00 to $575.00 and gave the stock an "overweight" rating in a research note on Monday, June 1st. One analyst has rated the stock with a Strong Buy rating, eighteen have given 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 related news, CEO Irving Tan sold 20,000 shares of the firm's stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $411.84, for a total transaction of $8,236,800.00. Following the completion of the sale, the chief executive officer directly owned 598,150 shares in the company, valued at approximately $246,342,096. This trade represents a 3.24% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 4,674 shares of the business's stock in a transaction that occurred on Monday, May 4th. The shares were sold at an average price of $443.19, for a total transaction of $2,071,470.06. Following the transaction, the insider directly owned 90,041 shares in the company, valued at $39,905,270.79. The trade was a 4.93% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 29,322 shares of company stock worth $12,768,550. Insiders own 0.18% of the company's stock.

More Western Digital News

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

• Positive Sentiment: Western Digital’s underlying fundamentals remain solid, with its latest quarterly results showing strong revenue growth, margins above 50%, and guidance that points to continued expansion.
• Positive Sentiment: Wall Street has remained constructive, with recent analyst action including higher price targets from JPMorgan and Morgan Stanley, reinforcing the long-term AI/storage growth narrative.
• Neutral Sentiment: The stock has been a major beneficiary of the memory-chip rally this month, so some pullback after a sharp run-up may simply reflect profit-taking and a cooldown in sentiment.
• Negative Sentiment: A broad selloff in tech and memory stocks is pressuring WDC, as investors worry about stretched AI valuations and weaker near-term chip sentiment. Article Title
• Negative Sentiment: Western Digital is also facing overhang from recent share-exchange transactions tied to its SanDisk stake, which may have raised near-term dilution or supply concerns. Article Title

Hedge Funds Weigh In On Western Digital

A number of hedge funds have recently modified their holdings of WDC. GHP Investment Advisors Inc. grew its stake in Western Digital by 9.2% in the first quarter. GHP Investment Advisors Inc. now owns 357 shares of the data storage provider's stock valued at $97,000 after purchasing an additional 30 shares in the last quarter. Cornerstone Planning Group LLC raised its stake in shares of Western Digital by 33.3% during the 1st quarter. Cornerstone Planning Group LLC now owns 132 shares of the data storage provider's stock worth $36,000 after purchasing an additional 33 shares in the last quarter. Alps Advisors Inc. lifted its holdings in shares of Western Digital by 0.8% during the 4th quarter. Alps Advisors Inc. now owns 4,707 shares of the data storage provider's stock valued at $811,000 after buying an additional 37 shares during the last quarter. Astoria Portfolio Advisors LLC. grew its stake in shares of Western Digital by 1.1% in the 1st quarter. Astoria Portfolio Advisors LLC. now owns 3,782 shares of the data storage provider's stock valued at $1,023,000 after buying an additional 40 shares in the last quarter. Finally, Quadcap Wealth Management LLC increased its holdings in Western Digital by 2.1% in the fourth quarter. Quadcap Wealth Management LLC now owns 2,007 shares of the data storage provider's stock worth $346,000 after buying an additional 41 shares during the last quarter. 92.51% of the stock is owned by institutional investors and hedge funds.

Western Digital Price Performance

The stock has a market cap of $231.19 billion, a price-to-earnings ratio of 40.04 and a beta of 2.13. The business has a fifty day moving average of $495.01 and a 200 day moving average of $332.35.

Western Digital (NASDAQ:WDC - Get Free Report) last posted its 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 net margin of 55.29% and a return on equity of 42.95%. The firm had revenue of $3.34 billion during the quarter, compared to analysts' expectations of $3.25 billion. During the same period in the previous year, the company earned $1.36 earnings per share. The company's revenue 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. On average, analysts expect that Western Digital Corporation will post 9.6 EPS for the current year.

Western Digital Increases Dividend

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

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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