Both Intel and WDC taking water this morning. Relentless selling.
Analyst Actions: Western Digital's Price Target From BMO Cut to $74 From $90 Amid Disappointing Q1 Guidance
MT NEWSWIRES 6:40 AM ET 7/27/2018
Symbol Last Price Change |
| WDC | 73.35 | -3.74 (-4.85%) | | QUOTES AS OF 09:46:29 AM ET 07/27/2018 |
06:40 AM EDT, 07/27/2018 (MT Newswires) -- Western Digital(WDC) received a price-target reduction Friday from BMO Capital Markets despite the data-storage company's late-Thursday report of better-than-expected results for its fiscal Q4 as its guidance for the current quarter missed Street views.
The new price target from BMO is $74 per share, down from $90. This brings the target below the stock's Thursday closing price of $77.09 as well. BMO kept its investment rating on the shares at market perform.
While BMO described Western Digital's(WDC) Q4 results as "mostly positive," the firm also noted to clients that the guidance for the quarter ending in September was below the firm's as well as overall Street estimates across all metrics, "as the company cited a weaker environment in mobility causing flash [average selling price] erosion."
In addition, the firm pointed out a beat in the June-ended quarter in hard-disk drives was based mostly on capacity drives, "while flash missed again as [average selling price] declines exceed cost cutting."
In turn, BMO lowered its estimates and price target on the stock. "The shares could be supported by valuation and a new $5 [billion] buyback program, but the flash business is uncertain," it added.
For the quarter ended June 29, Western Digital(WDC) reported adjusted earnings per share of $3.61, up from $2.93 a year earlier and above analysts' mean estimate of $3.50. Net revenue totaled $5.12 billion, up from $4.84 billion a year earlier and topping analysts' mean estimate of $5.06 billion.
However, investors were disappointed by the company's guidance for its fiscal Q1 ending in September, which calls for adjusted EPS of $3.00 to $3.10, well below analysts' mean estimate heading into the report for $3.56. The guidance also calls for Q1 revenue of $5.1 billion to $5.2 billion, below analysts' mean estimate at the time for $5.39 billion. The Street consensus estimates have since come down to $3.08 and $5.15 billion, respectively.
The company also said its board authorized a new $5 billion share repurchase program, replacing all prior programs. |
