Market Overview

Barclays Recommends Investors Initiate Or Add To Positions In Western Digital

Barclays Recommends Investors Initiate Or Add To Positions In Western Digital
Related WDC
Watch These 8 Huge Call Purchases In Thursday Trade
Rambus: 4 Ways To Win; JPMorgan Adds To Focus List
The Vetr community has downgraded $WDC to 4-Stars (Vetr)

Western Digital Corp (NASDAQ: WDC) preannounced healthy September-quarter numbers, while indicating that it would provide more details on its financial metrics during its late October earnings call. This commentary “is a positive development for investor sentiment,” Barclays’ Mark Moskowitz said in a report.

Analyst Moskowitz maintains an Overweight rating on Western Digital, with a price target from $34 to $29.

Previously, Western Digital had indicated that it would not be discussing segment margin and other long-term metrics until December, which resulted in investor concerns over the company’s model. “Now, there is potential for more goodness after today's event, in our view, which should help the stock,” Moskowitz stated.

Positive Update

Western Digital raised its projection of the September-quarter revenue from $4.4-$4.5billion to $4.45-$4.55 billion. The guidance for non-GAAP gross margin has been raised from 32 percent to approximately 33 percent. OpEx target has been raised from $875 million to $905 million, driven by higher incentive comps. The non-GAAP EPS projection has gone up from $0.85-$0.90 to $1.00-$1.05.

Related Link: Western Digital And Seagate Share A Unique Correlation

Western Digital indicated that favorable mix in both HDD and SSD had helped its results, along with favorable pricing conditions. “We think that this commentary should allay some investors' fears that industry discipline could not be sustained,” the analyst commented.

Moskowitz raised the EPS estimate for FY1 from $4.33 to $4.68. He added, “We recommend investors build or add to positions.”

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for WDC

Jan 2017BMO CapitalUpgradesMarket PerformOutperform
Jan 2017GuggenheimInitiates Coverage OnBuy
Dec 2016Goldman SachsUpgradesSellNeutral

View More Analyst Ratings for WDC
View the Latest Analyst Ratings

Posted-In: Barclays Mark MoskowitzAnalyst Color Long Ideas Reiteration Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (WDC)

View Comments and Join the Discussion!