Western Digital stock named top pick at Morgan Stanley, price target raised to $99

Investing.com - Morgan Stanley has named Western Digital (NASDAQ:WDC) as its new top pick in the storage sector, replacing Seagate Technology (NASDAQ:STX) and raising Western Digital’s price target to $99. The move comes as Seagate trades near its 52-week high of $173.41, having delivered an impressive 100% return year-to-date.

The investment bank also outlined a bull case price target of $125 for Western Digital , representing significant upside potential from current levels.

Morgan Stanley’s decision follows management meetings that increased the firm’s confidence in Western Digital’s technology roadmap.

The investment bank specifically noted that Western Digital’s current 20%+ valuation discount compared to peers appears unwarranted based on their analysis.

Morgan Stanley identified continued strong execution and accelerated capital returns as key factors that could help Western Digital close this valuation gap with competitors.

In other recent news, Seagate Technology reported strong financial performance for the June quarter, driven by robust global cloud demand. The company achieved record shipments of Nearline drives and saw an expansion in gross margins. In response to these results, Benchmark raised its price target for Seagate from $128 to $165, maintaining a Buy rating. Similarly, TD Cowen increased its price target to $175, citing momentum in Heat-Assisted Magnetic Recording (HAMR) technology and improved cloud visibility. Despite slightly below-market revenue guidance, these developments were seen as positive indicators for the company’s growth. Rosenblatt also raised its price target to $200, noting Seagate’s slight earnings beat and favorable trends in margin expansion and product mix. Additionally, Cantor Fitzgerald reiterated an Overweight rating on Seagate, reflecting its strong performance in the market. In a separate development, Seagate appointed Thomas Szlosek, AutoNation’s CFO, to its Board of Directors, where he will serve on the Audit and Finance Committee.

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