Western Digital (WDC): We See Upside To The Positive Preannouncement - RBC
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RBC Capital analyst, Amit Daryanani, reiterated his Outperform rating on shares of Western Digital Corp. (NASDAQ: WDC) and raised his price target to $65 from $60 and thinks WDC is seeing sustained tailwinds across both the HDD and NAND portfolio leading to 5-10% EPS upside vs. the early September preannouncement. Going forward, fundamentals should result in a better than anticipated guide for Dec-qtr but it's unclear if WDC would prefer to guide conservatively and positively update guidance at the Dec 8th analyst event.
In either guide scenario, estimates for WDC are positioned to keep moving higher through the end of CY16. The analyst "view(s) this as an attractive long through end of 2016 as WDC benefits from 1) Core HDD tailwinds from better PC + Hyperscale, 2) NAND upside from uptick in demand, limited supply and cost down benefits and 3) cost take-out benefits across HGST and SNDK and 4) tailwinds from lower interest expense and potentially tax-rate as well. Maintain OP, and adjusting our target to $65".
Shares of Western Digital Corp. closed at $58.47 yesterday.
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