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Investing.com - UBS raised its price target on Western Digital Corp. (NASDAQ:WDC) to $145.00 from $135.00 while maintaining a Neutral rating. The stock, currently trading at $138.13, has seen a remarkable 180.75% return over the past year and sits just 5% below its 52-week high of $145.68, according to InvestingPro data.
The firm cited "solidly better" results and guidance from Western Digital, which is benefiting from strong demand coupled with pricing and supply discipline that is pushing margins higher. This is reflected in the company’s impressive 50.7% revenue growth and 38.78% gross profit margin over the last twelve months.
UBS noted that artificial intelligence could structurally alter the cycle and extend the beneficial environment for Western Digital and Seagate Technology, though it expressed concern about the market paying increasingly higher multiples even as earnings per share rises. Western Digital currently trades at a P/E ratio of 31.4 and a price-to-book ratio of 7.84, suggesting the stock may be slightly overvalued compared to its InvestingPro Fair Value estimate.
The firm also pointed out that the industry’s reluctance to add additional unit capacity might be shifting customers toward high-capacity eSSDs, a trend UBS doesn’t expect to reverse as customers become accustomed to using eSSDs for nearline capacity.
UBS raised its calendar year 2026/2027 earnings per share estimates from $7.74/$7.05 to $8.17/$7.45, but maintained its Neutral rating, stating it would "rather own MU in the broader storage/memory complex." Analysts forecast Western Digital’s EPS for fiscal 2026 at $7.04, with the company already profitable at $4.45 diluted EPS over the last twelve months.
In other recent news, Western Digital Corporation reported its first-quarter financial results for fiscal year 2026, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $1.78, exceeding the forecasted $1.58, which represents a 12.66% surprise. Additionally, revenue for the quarter reached $2.82 billion, outpacing the anticipated $2.73 billion. In another development, Baird raised its price target for Western Digital from $97 to $180, maintaining an Outperform rating on the stock. The research firm highlighted Western Digital’s strategy to focus on higher-density migrations rather than expanding unit capacity, a move that aligns with industry practices. These recent developments provide investors with insights into the company’s financial performance and strategic direction.
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