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To: Sam who wrote (4076)

1/25/2019 8:31:54 AM

From: Sam

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Analyst Actions: Western Digital's Price Target From BMO Cut to $43 From $50, Market Perform Reiterated
MT NEWSWIRES 8:23 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

08:23 AM EST, 01/25/2019 (MT Newswires) -- Western Digital(WDC) received a reduction to its price target from BMO Capital Markets late Thursday after the data-storage technology company reported fiscal Q2 results below analysts' expectations and forecast Q3 results below Street views.

BMO's new price target on the stock is $43 per share, down from $50. The stock closed Thursday at $40.14 and rose 9.2% in recent Friday pre-market trading to $43.93. BMO kept its investment rating on the stock at market perform.

In a note to clients, BMO said while Western Digital's(WDC) Q2 revenue and adjusted earnings per share were at the low end of the company's guidance range despite a gross margin miss, "the company provided revenue guidance for the March quarter that was dramatically below our and Street expectations, with the gross margin at levels not witnessed in three years and EPS basically one-third of our prior estimate."

The firm thus lowered its estimates on Western Digital's(WDC) earnings and revenue through 2020, leading to the price-target cut.

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: 44.02, Change: +3.88, Percent Change: +9.67