Western Digital (NASDAQ: WDC) has been downgraded from a “buy” rating to a “hold” rating by analysts at Wall Street Zen in a report published on January 27, 2024. This adjustment follows a series of mixed reviews from various equity research firms, indicating a shift in investor sentiment towards the data storage company.
Analysts from Evercore reaffirmed an “outperform” rating while setting a price target of $230.00 on Western Digital shares. On January 30, Barclays updated their price target from $240.00 to $325.00, maintaining an “overweight” rating. Morgan Stanley also raised its price objective from $260.00 to $306.00, aligning with an “overweight” rating. New Street Research set a target price of $250.00 on February 3, and Wedbush reiterated an “outperform” rating with a $325.00 target on February 9.
Currently, one analyst has assigned a “Strong Buy” rating, while twenty have given a “Buy” rating, and three have issued a “Hold” rating. According to data from MarketBeat, Western Digital holds an average rating of “Moderate Buy,” with an average target price of $265.58.
Financial Performance and Outlook
Western Digital’s most recent quarterly earnings report, released on January 29, 2024, revealed an earnings per share (EPS) of $2.13, surpassing the consensus estimate of $1.93 by $0.20. The company reported revenue of $3.02 billion, exceeding analyst expectations of $2.93 billion. The net margin stood at 35.52% with a return on equity of 41.53%. This represents a year-over-year revenue increase of 25.2%, compared to $1.77 EPS from the same quarter last year. Analysts forecast that Western Digital will achieve an EPS of 4.89 for the current fiscal year.
Insider Trading Activity
In related news, CEO Irving Tan sold 20,000 shares of the company’s stock on February 2, 2024. The shares were sold at an average price of $255.44, totaling approximately $5.1 million. Following this transaction, Tan holds 623,586 shares valued at around $159.3 million, marking a 3.11% reduction in his holdings. This sale was reported in a legal filing with the SEC.
Additionally, Director Roxanne Oulman sold 1,800 shares on November 25, 2023, at an average price of $154.42, amounting to a total of $277,956. After this transaction, Oulman owns 3,863 shares valued at approximately $596,524. In the past ninety days, insiders have sold a total of 70,522 shares worth $17.7 million, representing a modest 0.18% ownership of the company.
Institutional Investment Trends
Several institutional investors have recently adjusted their stakes in Western Digital. WCM Investment Management LLC acquired a new position valued at approximately $791.3 million during the third quarter. Norges Bank also made a significant investment in the fourth quarter, purchasing shares worth $788.7 million. Fred Alger Management LLC dramatically increased its holdings by 4,923.9% in the same quarter, now owning 3,407,042 shares valued at $409.0 million.
Soroban Capital Partners LP raised its stake by 1,926.3% during the second quarter, now holding 3,061,134 shares valued at $195.9 million. Lastly, Polar Capital Holdings Plc bought a new position worth $221.8 million in the third quarter. Institutional investors now control 92.51% of Western Digital’s stock.
Founded in San Jose, California, Western Digital Corporation specializes in the design, manufacturing, and sale of a wide range of data storage devices and systems. Its product portfolio includes hard disk drives (HDDs), solid-state drives (SSDs), and various storage solutions for personal, enterprise, and cloud applications.
