WDC, NAND, NVM, enterprise storage systems, etc. Message Board

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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

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From: Unwelcomeguest	6/22/2020 12:54:04 PM
	1 Recommendation of 4826

Barron's article about WDC and the Benchmark upgrade with $60 PT. The upgrade doesn't seem to be doing much good so far. UWG Link: barrons.com Western Digital Is a Rare Cheap Tech Stock. It Just Got an Upgrade. By Eric J. Savitz June 22, 2020 11:37 am ET Western Digital shares have been left out of this year’s tech rally. The provider of disk drives and memory chips has been struggling from a combination of supply chain issues, competitive forces and a heavy debt load. Western’s recent decision to suspend its dividend to redirect cash to paying down debt may have been financially prudent, but the move was none-too-popular with investors attracted by what was once a rich yield. For the year to date, the stock is down 29%. In fact, Western Digital (ticker: WDC) is at the top of a screen for tech stocks trading at low multiples of sales that Barron’s recently ran. While many cloud-based enterprise software stocks now sport price-to-sales ratios of 25 times or higher, Western trades for less than one times sales. Benchmark Co. analyst Mark Miller took a fresh look at the company Monday morning, and lifted his rating on Western shares to Buy from Hold, setting a price target of $60. The analyst finds cross-currents in the Western Digital story. The pandemic has driven up storage demand for both data centers and laptops, but the company’s retail product sales have been slow due to widespread retail store closings. He says solid-state drives offer performance advantages for gamers, despite higher costs than conventional magnetic drives. He also notes that while Covid-19 has slowed smartphone sales, the company should benefit from the shift to 5G phones. Miller asserts that the company is ramping up production of a new 18 terabyte driver using a technology called energy-assisted magnetic recording, or EAMR. He says the company expects to ship 1 million EAMR drives in the September quarter. Miller adds that Western is gaining market share in the enterprise solid-state drive market, and is making progress on a new generation of NAND flash memory chips. Meanwhile, Miller says that Western Digital’s production levels are back to pre-Covid levels, noting that the company is working to restore component inventory levels which fell due to the virus-related shutdown. Western Digital shares on Monday are down fractionally at $44.01. Write to Eric J. Savitz at eric.savitz@barrons.com

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