Western Digital stock target raised to $62 at BofA Securities

On Thursday, BofA Securities increased its price target on shares of Western Digital Corp. (NASDAQ:WDC) to $62 from $58, while maintaining a Buy rating on the stock. The revision followed Western Digital’s reported financial results for the third fiscal quarter, which exceeded BofA Securities’ expectations. According to InvestingPro data, Western Digital, a prominent player in the Technology Hardware industry with a market capitalization of $15.26 billion, appears undervalued based on its Fair Value analysis.

Western Digital announced revenues of $2.3 billion and earnings per share (EPS) of $1.36, surpassing the BofA Securities’ forecasts of $2.25 billion in revenue and an EPS of $1.13. The company’s management highlighted the successful ramp-up of their CMR (26TB) and UltraSMR (32TB) drives, which achieved a combined shipment of 800,000 units in the March quarter. The company’s trailing twelve-month revenue stands at $15.61 billion, with a healthy P/E ratio of 13.35x.

Looking ahead, Western Digital provided guidance for the fourth fiscal quarter, anticipating revenues of $2.45 billion and EPS of $1.45. This forecast is above the estimates from BofA Securities, which projected $2.39 billion in revenue and $1.19 EPS for the same period. The company also indicated that it is on track to ship over 1 million units of CMR and UltraSMR drives in the June quarter.

The gross margin for the fourth fiscal quarter is expected to reach 40.5% at the midpoint, which is higher than the 39.2% previously estimated by BofA Securities. The firm reiterated its Buy rating on Western Digital, citing the secular growth of the hard disk drive (HDD) market and the potential for continued gross margin improvement.

In other recent news, Western Digital Corporation reported impressive earnings for the third quarter of fiscal year 2025, with earnings per share (EPS) of $1.36, significantly surpassing analyst expectations of $0.79. The company achieved a revenue of $2.3 billion, marking a 31% increase year-over-year, although it fell short of the anticipated $3.86 billion. Cloud revenue constituted a substantial 87% of total revenue, underscoring the company’s strategic focus on cloud storage solutions. Additionally, Western Digital launched new high-capacity storage platforms, further strengthening its position in the hyperscale and data center markets.

In a separate development, JPMorgan upgraded Western Digital’s stock rating from Neutral to Overweight, raising the price target from $45 to $57. This upgrade reflects the company’s successful separation of its NAND flash business and its focus on advancing hard disk drive technology. For the upcoming quarter, Western Digital has guided revenues to $2.45 billion, surpassing the consensus estimate of $2.36 billion. The company anticipates a gross margin between 40-41% and expects sequential revenue growth driven by strong demand in the data center sector.

Western Digital’s management has highlighted long-term agreements with major hyperscale customers, providing visibility through the first half of 2026. Despite potential demand challenges due to tariffs and trade-related dynamics, the company remains confident in its ability to navigate these uncertainties. Western Digital’s strategic initiatives and robust product offerings continue to position it well in the evolving data storage landscape.

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