Market Overview

SanDisk Acquisition Likely Led To Western Digital Guidance Raise

Share:
SanDisk Acquisition Likely Led To Western Digital Guidance Raise

Western Digital Corp (NASDAQ: WDC) raised its fiscal fourth-quarter guidance and announced its chief strategy office would be assuming the role of CFO in September 2016.

Argus’ Jim Kelleher reiterated a Buy rating on the company, with a price target of $60.

Guidance Raised

“Western Digital has raised its fiscal fourth-quarter guidance, likely reflecting better NAND trends at the recently acquired SanDisk as well as a cyclical bump in the structurally declining HDD industry,” Kelleher mentioned.

The company announced its preliminary revenue for fiscal 4Q16 at $3.46 billion, above the high end of the guidance that had been issued after the closing on the SanDisk Corporation (NASDAQ: SNDK) acquisition.

Western Digital also expects its non-GAAP EPS for the quarter to come in above the high end of the earlier guidance range.

Related Link: Brean Capital Sees 130% Upside For Western Digital, At Street High

In addition, Chief Strategy Officer Mark Long is to assume the role of CFO, since Western Digital’s finance and strategy arms work in close cooperation.

“CEO Steve Milligan noted that WDC is going through a strategic and organizational transformation as the company integrates its two HDD businesses, WD and HGST, and the recently acquired SanDisk business,” according to the Argus report.

Impact Of The SanDisk Acquisition

Kelleher believes with the SanDisk acquisition, Western Digital has created a more sustainable business model.

Along with the continued robust cash flows from Western Digital’s legacy HDD business, the analyst believes the company is “now positioned to participate in growth markets from data center to cloud host to mobility.”

Since the HDD business is faced with various cyclical and structural challenges, the SanDisk acquisition is likely to offer a clear path forward for Western Digital as an integrated supplier of memory solutions.

Latest Ratings for WDC

DateFirmActionFromTo
Jan 2019Evercore ISI GroupDowngradesIn-LineUnderperform
Dec 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Dec 2018Craig-HallumUpgradesHoldBuy

View More Analyst Ratings for WDC
View the Latest Analyst Ratings

Posted-In: Argus Jim KelleherAnalyst Color News Guidance Reiteration M&A Analyst Ratings Best of Benzinga

 

Related Articles (SNDK + WDC)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
CASADA DavidsonInitiates Coverage On12.0
RCIIJefferiesMaintains22.0
DPLOMorgan StanleyMaintains8.0
QLYSSummit Insights GroupDowngrades0.0
ECACitigroupReinstates0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Trader Essentials
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Havertys Q2 Comparable Store Sales Advance 3.8%

Lean Hog Futures Little Changed