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Investing.com -- Bank of America reiterated its Buy rating on Western Digital and raised its price target to $145 from $141 in a note, citing stronger-than-expected preliminary data for the company’s fiscal first quarter and signs of market share gains.
“Preliminary F1Q26 data is indicating WDC share gains,” BofA analyst Wamsi Mohan wrote, adding that it now models “F1Q rev/EPS of $2.79bn/$1.63, above Street est of $2.72bn/$1.60.”
The analyst said their estimates are “near the top of WDC’s guided range ($2.8bn/$1.69) as preliminary data indicates WDC is seeing share gains of +40bps q/q & 220bps y/y (~43.3% share).”
BofA noted the company shipped about 2 million units of its “26TB CMR & 32TB UltraSMR drives as the company continues to ramp production of their highest capacity drives.”
The firm expects gross margins to rise by 50 basis points quarter over quarter, to above the mid-point of guidance at 41.5 percent.
“Reiterate Buy on WDC on secular growth of HDD market and continued GM upside,” BofA said.
For the second fiscal quarter, BofA models “rev/EPS of $2.8bn/$1.74” and expects the company to guide to an operating margin near 29 percent, adding that “WDC could approach 30% OM in F2Q if the company can ship upside in the quarter.”
BofA’s model also points to a potential record shipment level. “WDC could ship 200EBs in the December quarter, which would be a new quarterly record for HDD companies,” the analysts wrote.