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Investing.com - Cantor Fitzgerald raised its price target on Western Digital Corp. (NASDAQ:WDC) to $85.00 from $60.00 on Monday, while maintaining an Overweight rating on the stock. The new target represents potential upside from the current price of $68.82, though InvestingPro data indicates the stock is currently trading above its Fair Value.
The research firm expects Western Digital to deliver another quarter of beat-and-raise results, with potential upside to revenues, gross margins, and earnings per share for both the June and September quarters. The company has demonstrated strong momentum, with a 45% price return over the past six months and a healthy gross profit margin of 28.6%.
Cantor Fitzgerald sees continued strength in the Cloud/Nearline segment driving revenues, profitability, and pricing higher for Western Digital, similar to trends observed at competitor Seagate.
While tariffs could pose a concern, the firm believes Western Digital will highlight minimal impact in terms of pull-ins and demonstrate an ability to pass costs to customers as market conditions evolve.
Cantor Fitzgerald projects Western Digital’s calendar year 2026 earnings potential at over $6 per share and believes the company deserves a multiple similar to Seagate, approximately 14x, given its structurally more profitable industry position and expanding margin profile. The company currently maintains a solid financial position with a current ratio of 1.56 and has demonstrated strong profitability with a return on equity of 14%.
In other recent news, Western Digital Corp. announced the authorization of a new $2.0 billion share repurchase program, reflecting confidence in its long-term business outlook. This initiative follows the company’s recent start of a quarterly dividend, underscoring its commitment to shareholder value. Mizuho (NYSE:MFG) raised its price target for Western Digital to $75, maintaining an Outperform rating, based on a higher earnings estimate for fiscal 2026. Similarly, Citi increased its price target to $62, maintaining a Buy rating due to optimism about revenue growth and strong demand in the HDD sector. JPMorgan reiterated its Overweight rating and $57 price target, noting Western Digital’s strong position in cloud and hyperscale spending, though potential weaknesses were identified in smaller revenue segments. BofA Securities also maintained a Buy rating with a $62 target, highlighting Western Digital’s financial strategies, including a pledge to return 100% of excess cash to shareholders. Analysts at BofA projected significant share repurchases, supported by robust free cash flow forecasts for 2026. These developments reflect ongoing confidence in Western Digital’s financial health and strategic initiatives.
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