Western Digital Gets Love From Analysts Following Q2 Beat

Analysts at Benchmark, Wells Fargo, Longbow and Mizuho weighed in positively on data-storage specialist Western Digital.
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Western Digital  (WDC) - Get Report shares are higher after the data-storage company topped fiscal-second-quarter estimates and a number of analysts issued bullish comments.

The San Jose, Calif., company reported adjusted earnings of 62 cents a share, topping teh consensus estimate of 58 cents compiled in a FactSet survey. Revenue was flat with a year earlier at $4.2 billion, matching analyst estimates.

"The December-quarter results reflect strong execution in our product road map, success in increasing our hard-drive gross margin, and an improving flash market," CEO Steve Milligan said in a statement.

Wells Fargo analyst Aaron Rakers also affirmed a buy rating. And analysts at Benchmark raised their recommendation to hold from sell after the report. 

At Longbow analysts boosted the price target on WDC to $88 a share from $80 after Western Digital confirmed that data-center customers are driving better-than-expected demand.

The company also guided investors and analysts to March-quarter sales between $4.1 billion and $4.3 billion, topping analyst estimates of $4.06 billion. Earnings should come in at 85 cents to $1.05 a share, ahead of Wall Street’s estimate of 73 cents.

"We expect an accelerated recovery in our flash gross margins, which, coupled with ongoing strength in demand for both hard drives and flash, positions us well for continued profitable growth in calendar year 2020,” Milligan said. 

Analysts at Mizuho raised their price target to $80 from $75, citing the guidance as the reason for the raised optimism. Analyst Vijay Rakesh reiterated his buy rating on the stock.

At last check Western Digital shares were 5.2% higher at $70.44.