Russ Cohen

Western Digital Expected Earnings Surge At the High End Anticipated High-End Earnings for Western Digital Corporation

Shares of Western Digital Corp WDC surged in early trading on Tuesday, following top analysts’ forecast revisions for several stocks.

The San Jose, California-based company is likely to report its fiscal second-quarter results at the high end of guidance, owing to the rapid improvement in NAND pricing since October, as per Deutsche Bank’s analysis.

Analysis by Sidney Ho: Sidney Ho, the Western Digital analyst, upgraded the rating for Western Digital from Hold to Buy, while increasing the price target from $45 to $65.

Reasoning Behind the Upgrade: No regulatory approval is needed for the company’s spin-off of its Flash business, projected to be completed as planned in the second half of 2024, Ho stated in the upgraded note.

Ho raised Western Digital’s earnings estimates for the fiscal second and third quarters from -$1.20 per share to -$1.05 per share (versus the guidance range of -$1.20 +/-$0.15) and from -76 cents per share to -34 cents per share, respectively.

This was largely attributed to improvements in NAND pricing and the recent issuance of $1.6 billion in convertible debt on 11/3/23, with a portion of the proceeds being used to pay down other debt obligations,” he added.

Expressing positivity, Ho further remarked, “With the stock trading below the lower end of the range, we believe the risk-reward is attractive.”

WDC Price Action: Western Digital’s shares had risen by 4.19% to $52.10 at the time of publication on Tuesday.

Now Read: 10 Analysts Assess Western Digital—What You Need To Know

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