Western Digital (WDC) PT Raised to $60 at RBC Capital Following Raised Outlook

September 7, 2016 10:04 AM EDT
Get Alerts WDC Hot Sheet
Price: $56.52 +5.39%

Rating Summary:
    25 Buy, 9 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 17 | Down: 27 | New: 7
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RBC Capital analyst Amit Daryanani reiterated an Outperform rating and boosted his price target on Western Digital Corp. (NASDAQ: WDC) to $60.00 (from $56.00) after the company pre-announced better than expected Q1 results.

Daryanani commented, "WDC positively pre-announced Sept-qtr results with upside to both revenues and EPS vs. its initial guide. WDC expects Sept-qtr results to be ~$4.45-4.55B/$1.00-1.05 (~15c EPS upside vs. its guide). Much of the upside appears to be gross margin driven (~100bps upside) coupled with benefits from lower interest expense that is partially offset by higher-than-planned OPEX. We are raising our forward estimates higher to reflect the Sept-qtr upside and lower interest expense from the recent debt refi that company did. Fundamentally, we think WDC should see revenue/EPS ahead of expectations in H2:16 and possibly in H1:17 given the confluence of strong HDD fundamentals coupled with a supply-constrained NAND environment, in our opinion. We further see EPS upside getting amplified from sustained deleverage and lower tax rate as well. Maintain OP and adjusting our target to $60."

For an analyst ratings summary and ratings history on Western Digital Corp. click here. For more ratings news on Western Digital Corp. click here.

Shares of Western Digital Corp. closed at $47.55 yesterday.

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