Western Digital Still Worth $124/Share, Needham Says

In a report published Wednesday, Needham analysts reiterate their Strong Buy rating on Western Digital Corp (NASDAQ: WDC), as well as the price target of $124.According to Needham, "With estimates now coming down to reflect the PC demand dynamics (yet strength in enterprise, hyperscale and SSDs) we expect WDC to find a floor after the estimate revision disappointment gives way to upside opportunity on what we believe is a conservative June guide."The company has reported its F3Q revenue and non-GAAP EPS below the consensus and the guidance. However, the unit shipments were in-line with the estimates. F3Q was expected to be a softer quarter for the company, with the F4Q already being revised below the Street expectations. "This guide assumes macro weakness continues to impact the PC markets but that Enterprise and Hyperscale remain solid," Deutsche Bank explained.On a more positive note, Western Digital pricing remains stable, while its inventories are well maintained, across the globe. The company has restrained its production in order to maintain the supply/demand balance, given that European demand has been weaker, possibly due to Fx."Looking forward, WDC expects its new NVMe PCI solution to also drive demand... WDC is also optimistic about its Active Archive solution, which is entirely vertically integrated and we believe could become meaningful over time," the analysts added.