Market Overview

Barclays Describes How Stronger PC Trends Help HP, Seagate And Others

Barclays Describes How Stronger PC Trends Help HP, Seagate And Others
Related WDC
Benzinga's Weekly Bulls & Bears: Bitcoin, Ford, Lululemon, Nike And More
Morgan Stanley: Western Digital's NAND Forecast May Be Overly Bullish
Related STX
Western Digital And Toshiba: The Settlement And The Guidance, Explained
Seagate Earns A Strong Buy From Vetr
Seagate Technology goes ex-dividend tomorrow (Seeking Alpha)

There were signs of the PC market bottoming in the coming months, Barclays’ Mark Moskowitz said in a report.

IDC published its preliminary PC market estimates for the June quarter on Monday. PC units were estimated at 62.4M, representing a 4.5 percent y/y decline. Analyst Mark Moskowitz noted that the previous estimate was at 59.2M, implying a 9.4 percent decline. He added, “Despite the better trend-line, we point out that IDC's estimates are preliminary and could be revised up or down in the coming weeks.”

Slowing Rate Of Decline

The projected 4.5 percent decline in PC units compares with y/y declines of 12.5 percent in the March quarter and 11.4 percent in the December quarter. The slowing rate of declines may be signaling a bottom in the coming months, Moskowitz commented.

Although a single quarter cannot be classified as a trend, there is “a decent probability” of the PC market being close to “adjusting for the ill-effects of smartphones and tablet-related displacement of PCs that began more than 5 years ago,” the analyst mentioned. He added that this could set the stage for an improved PC operating environment in 2017.

Related Link: HP Inc Ranks Second In PC Market Share, Apple's PC Market Share Declines From A Year Ago

Implications For Companies

  • Western Digital Corp (NASDAQ: WDC) and Seagate Technology PLC (NASDAQ: STX) would benefit from stronger PC trends. While PCs generated less than 50 percent of revenue for HDDs, the end market had been “an important bogey for the stocks,” Moskowitz said.
  • HP Inc (NYSE: HPQ) is likely to benefit from stronger PC sales, as the Personal Systems business stabilizing may partially offset the impact of the challenges being faced by the Printing business in the near term.
  • CDW Corp (NASDAQ: CDW) may also benefit in the near term due to its exposure to PC trends as well as its US centric model. “We note however that CDW reduced its Chromebook exposure in recent quarters,” the analyst added.

Did you like this article? Could it have been improved? Please email to let us know!

Latest Ratings for WDC

Dec 2017Morgan StanleyMaintainsEqual-Weight
Dec 2017Summit Redstone PartnersUpgradesHoldBuy
Nov 2017Morgan StanleyDowngradesOverweightEqual-Weight

View More Analyst Ratings for WDC
View the Latest Analyst Ratings

Posted-In: Barclays Mark MoskowitzAnalyst Color Analyst Ratings Best of Benzinga


Related Articles (HPQ + CDW)

View Comments and Join the Discussion!