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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.
SNDK 262.35+7.7%11:06 AM EST
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To: JCnieuwenj who wrote (4075)1/25/2019 8:19:37 AM
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Analyst Actions: Western Digital's Price Target From RBC Boosted to $46 From $40, Sector Perform Maintained
MT NEWSWIRES 8:17 AM ET 1/25/2019

Symbol Last Price Change
WDC 40.14 0 (0%)
QUOTES AS OF 04:15:00 PM ET 01/24/2019


08:17 AM EST, 01/25/2019 (MT Newswires) -- Western Digital(WDC) received a boost to its price target from RBC Capital Markets late Thursday despite the data-storage technology company reporting fiscal Q2 results below analysts' expectations and forecasting Q3 results below Street views.

RBC's new price target on the stock is $46 per share, up from $40. The shares closed Thursday's session at $40.14 and rose 9.2% to $43.85 in recent Friday pre-market trading. RBC kept its investment rating on the shares at sector perform.

In a note to clients, RBC said while Western Digital's(WDC) fiscal Q2 came in below Street expectations and its Q3 guidance was disappointing, the firm saw "several positives through the call that provide a framework for WDC starting to achieve a trough in [Q3] before inflecting higher in [Q4] and through [fiscal 2019]."

The firm highlighted "comfort around balance sheet and leverage," with the dividend remaining intact; aggressive actions including $800 million in cost cuts; and a "robust product portfolio" in calendar 2019, adding this should help boost the company's market share in hard-disk drives as well as NVMe solid-state drives.

RBC added: "While we do think there is some risk that demand could degrade further across HDD & NAND, this print and cost reduction efforts appear closer to forming a bottom."

For its fiscal Q2 ended Dec. 28, Western Digital(WDC) reported adjusted earnings per share of $1.45, down from $3.95 a year earlier and below analysts' mean estimate of $1.50. Net revenue declined to $4.23 billion from $5.34 billion a year earlier, missing analysts' mean estimate of $4.26 billion.

For its fiscal Q3 ending March 29, the company forecast revenue of $3.6 billion to $3.8 billion and adjusted EPS of $0.40 to $0.60, well below analysts' mean estimates heading into the guidance for revenue of $3.89 billion and adjusted EPS of $1.06. The Street's consensus estimates have since come down to $3.69 billion and $0.48, respectively.

Western Digital (WDC) also said it expects Q3 adjusted gross margin at about 28%, which compares with a Street consensus estimate ahead of the guidance of 30.4%; analysts' mean estimate has since come down to 28.1%.

Price: 44.12, Change: +3.98, Percent Change: +9.92
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