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On Monday, Cantor Fitzgerald adjusted its outlook on Western Digital Corp. (NASDAQ:WDC), currently trading at $40.78 with a market capitalization of $14.2 billion, by reducing the stock’s price target to $50 from the previous $65, while maintaining an Overweight rating on the shares. According to InvestingPro data, the company is set to report earnings in just two days, with analysts showing increased optimism through recent upward revisions. The adjustment comes as the firm anticipates Western Digital’s first earnings report under new management to align closely with the projections shared during its February Analyst Day. The March quarter’s performance is expected to be below consensus expectations, but still in line with the company’s previous guidance.
The firm also anticipates guidance for the June quarter to meet expectations, supported by robust cloud demand and a slight recovery in the Client/Consumer segment after a revenue decline in the March quarter. The stock has shown strong momentum recently, gaining over 13% in the past week, despite broader market volatility. InvestingPro analysis suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for investors. Despite the price target reduction, Cantor Fitzgerald’s analysts believe that the hard disk drive (HDD) market maintains a disciplined and profit-focused oligopoly, which, combined with the continued strength in cloud demand, should lead to gross margin expansion to over 40% in the second half of the calendar year 2025.
The new price target is based on a price-to-earnings (P/E) multiple of 10 times, which is a decrease from the previous multiple of 13 times but consistent with the updated multiple for Seagate Technology (STX), another company in the sector. The P/E multiple is applied to the forecasted CY26E earnings per share (EPS) of $4.80.
Western Digital’s upcoming earnings report will mark a significant moment for the company’s new leadership team and provide a clearer picture of its current financial health and future prospects. The firm’s analysis suggests that while near-term challenges persist, the foundations for a recovery in the latter half of the year seem to be in place, with cloud demand and HDD market dynamics playing crucial roles. For deeper insights into Western Digital’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which offer exclusive metrics and expert perspectives on over 1,400 US stocks.
In other recent news, Western Digital Corp has been the focus of several analyst updates and strategic developments. Mizuho (NYSE:MFG) Securities revised its price target for the company from $82.00 to $68.00 while maintaining an Outperform rating, citing lower-than-expected revenue and earnings estimates for the upcoming fiscal years. Morgan Stanley (NYSE:MS), on the other hand, upgraded the stock to Overweight, setting a new price target of $46.00, and highlighted potential upside due to Western Digital’s valuation and strategic efforts to reduce debt. BofA Securities reaffirmed a Buy rating with a $58.00 price target, expressing confidence in the company’s competitive positioning and advancements in hard disk drive technology, particularly in the AI and hyperscale data center markets.
Additionally, Western Digital completed the spin-off of its flash business into Sandisk Corporation, leading to the reclassification of Sandisk’s historical results as discontinued operations in its financial statements. Benchmark analysts maintained a Hold rating on Western Digital, noting the broader memory chip market trends highlighted by Micron (NASDAQ:MU)’s recent update. These developments, including strategic shifts and analyst perspectives, are shaping investor views on Western Digital’s future performance in the dynamic storage market.
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