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Gene M. Zamiska, Senior Vice President and Principal Accounting Officer at Western Digital Corp (NASDAQ:WDC), a $14.1 billion market cap technology storage company trading at a P/E ratio of 11.14, executed a significant stock transaction recently. The stock has declined nearly 14% over the past week and is currently trading near its 52-week low of $39.41. On March 7, Zamiska sold 1,659 shares of Western Digital common stock at a price of $41.36 per share, totaling approximately $68,616. This sale was conducted under a pre-arranged Rule 10b5-1 trading plan established on December 1, 2023. Following this transaction, Zamiska’s direct ownership stands at 43,776 shares. According to InvestingPro analysis, Western Digital currently appears undervalued based on its Fair Value assessment.
Additionally, on March 6, Zamiska disposed of 1,116 shares to cover tax obligations related to the vesting of securities, valued at $46,258, at a price of $41.45 per share. InvestingPro subscribers have access to 10 additional key insights about Western Digital, including detailed analysis of its financial health, which is currently rated as FAIR.
In other recent news, Western Digital Corp. has been the focus of several significant developments. The company recently completed the spin-off of its flash business, SanDisk, which has led to a credit rating upgrade from S&P Global Ratings, moving from ’BB’ to ’BB+’. This spin-off is expected to bring in approximately $600 million for Western Digital, which will aid in reducing its debt levels. Additionally, Citi has raised its price target for Western Digital shares to $64, maintaining a Buy rating, while Cantor Fitzgerald adjusted its target to $65, also keeping an Overweight rating.
Western Digital’s financial policies have been clarified post-spin, with plans to maintain net leverage between 1.5x and 1.0x. The company aims to resume dividends in the fourth quarter of fiscal year 2025, with shareholder returns prioritized after achieving target leverage levels. The firm’s revenue growth is expected to exceed 40% in fiscal 2025, driven by a rebound in the hard disk drive (HDD) market, which has seen an over 80% increase in sales in the first half of the current fiscal year.
Fitch Ratings affirmed Western Digital’s Long-Term Issuer Default Rating at ’BB+’ and removed the company from its Rating Watch Negative list. Fitch anticipates stable revenue growth following the SanDisk separation, driven by long-term demand for mass capacity drives. Western Digital’s gross profit margins are projected to rise due to favorable sales mix dynamics and an improved competitive position against Seagate Technology. However, Fitch cautions that technology risks remain significant, which could impact profitability.
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