FBN Lifts PT on Western Digital (WDC) to $55 Amid Positive Q1 Preannouncement
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FBN Securities boosts its price target on Outperform-rated Western Digital (Nasdaq: WDC) from $50 to $55 following increased Q1 guidance issued earlier Wednesday.
Analyst Shebly Seyrafi commented today,
We retain our Sector Perform rating on WDC and raise our PT from $50 to $55 following its positive preannouncement for FQ1/Sept. made today before the company presents at an investment conference. FQ1 revenue is now guided to be $4.45-$4.55B, above the prior $4.4-$4.5B guidance, due to better than expected execution, continued progress in integrating the WD and HGST subsidiaries, the ability to address a larger number of customers with a broad portfolio of HDD and flash storage, and better-than-expected product mix. MG is expected to be ~33% (higher than the prior 32% guidance), NG opex is expected to be $905M (higher than the prior $875M guidance due to higher incentive compensation due to the stronger performance). NG EPS is expected to be $1.00-$1.05, above the prior $.85-$.90 estimate. This preannouncement comes roughly two months after its positive preannouncement made for FQ4 made on July 8 (when it stated that revenue would be at the high-end of its guidance with EPS above guidance). We believe that WDC’s positive preannouncement is an incremental positive for HPQ (SP-rated) as well as HPE (O-rated) which reports tonight.
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