Western Digital (NASDAQ:WDC) Trading Up 2.1% - Should You Buy?

Key Points

• Shares up 2.1% — Western Digital rose to about $301.05 on Tuesday with trading volume ~31% below average; the stock trades well above its 50‑day ($267.28) and 200‑day ($189.04) moving averages and has a market cap of ~$102.1B.
• Analyst sentiment positive — MarketBeat shows a consensus of "Moderate Buy" (1 Strong Buy, 20 Buys, 3 Holds) with an average target of $265.58 while several brokers have raised targets (e.g., Rosenblatt $340, Wedbush $325, Morgan Stanley $306).
• Fundamentals and insider activity — Western Digital beat quarterly estimates (EPS $2.13 vs $1.93 est., revenue $3.02B, +25.2% YoY) and has strong margins (ROE 41.5%, net margin 35.5%), but insiders sold ~92,795 shares (~$24.3M) in the last 90 days and institutional ownership stands at ~92.5%.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) was up 2.1% during trading on Tuesday . The company traded as high as $301.35 and last traded at $301.05. Approximately 6,915,695 shares traded hands during trading, a decline of 31% from the average daily volume of 10,074,843 shares. The stock had previously closed at $294.79.

Analyst Ratings Changes

Several brokerages recently weighed in on WDC. Wedbush restated an "outperform" rating and issued a $325.00 price target on shares of Western Digital in a research report on Monday, February 9th. Bank of America increased their price objective on shares of Western Digital from $197.00 to $257.00 and gave the company a "buy" rating in a research report on Tuesday, January 20th. Morgan Stanley lifted their price objective on shares of Western Digital from $260.00 to $306.00 and gave the stock an "overweight" rating in a research note on Friday, January 30th. Rosenblatt Securities restated a "buy" rating and issued a $340.00 target price on shares of Western Digital in a report on Wednesday, February 4th. Finally, Cantor Fitzgerald increased their price target on shares of Western Digital to $325.00 and gave the company an "overweight" rating in a report on Friday, January 30th. One equities research analyst has rated the stock with a Strong Buy rating, twenty have assigned a Buy rating and three have given a Hold rating to the company's stock. Based on data from MarketBeat, Western Digital presently has a consensus rating of "Moderate Buy" and an average target price of $265.58.

Western Digital Price Performance

The stock has a 50 day moving average of $267.28 and a 200-day moving average of $189.04. The company has a current ratio of 1.46, a quick ratio of 1.19 and a debt-to-equity ratio of 0.34. The stock has a market capitalization of $102.07 billion, a P/E ratio of 30.20, a price-to-earnings-growth ratio of 0.68 and a beta of 1.76.

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

Western Digital Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, March 18th. Investors of record on Thursday, March 5th were paid a $0.125 dividend. This represents a $0.50 annualized dividend and a yield of 0.2%. The ex-dividend date of this dividend was Thursday, March 5th. Western Digital's dividend payout ratio (DPR) is currently 5.02%.

Insider Activity at Western Digital

In other Western Digital news, Director Matthew E. Massengill sold 36,926 shares of the company's stock in a transaction dated Thursday, February 5th. The shares were sold at an average price of $260.43, for a total value of $9,616,638.18. The sale was disclosed in a filing with the SEC, which is available through this link. Also, insider Vidyadhara K. Gubbi sold 8,518 shares of the firm's stock in a transaction that occurred on Friday, March 6th. The stock was sold at an average price of $255.32, for a total transaction of $2,174,815.76. Following the transaction, the insider directly owned 99,276 shares in the company, valued at approximately $25,347,148.32. This trade represents a 7.90% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders have sold 92,795 shares of company stock worth $24,265,884. Corporate insiders own 0.18% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the company. WCM Investment Management LLC bought a new stake in Western Digital during the 3rd quarter valued at $791,317,000. Norges Bank bought a new position in shares of Western Digital during the 4th quarter worth $788,729,000. Fred Alger Management LLC increased its stake in shares of Western Digital by 4,923.9% during the third quarter. Fred Alger Management LLC now owns 3,407,042 shares of the data storage provider's stock valued at $409,049,000 after buying an additional 3,339,225 shares during the period. Soroban Capital Partners LP increased its stake in shares of Western Digital by 1,926.3% during the second quarter. Soroban Capital Partners LP now owns 3,061,134 shares of the data storage provider's stock valued at $195,882,000 after buying an additional 2,910,062 shares during the period. Finally, Polar Capital Holdings Plc bought a new stake in shares of Western Digital in the third quarter valued at about $221,800,000. Institutional investors own 92.51% of the company's stock.

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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