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Western Digital (WDC) / Seagate (STX) PTs Raised at Brean Capital

December 20, 2013 10:39 AM EST Send to a Friend
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Price: $91.05 --0%

Rating Summary:
    15 Buy, 10 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Brean Capital maintained a Buy rating on Western Digital Corp. (NASDAQ: WDC) and raised its price target to $125.00 (from $85.00). Seagate Technology's (Nasaq: STX) target was raised to $70 from $55.

Analyst Ananda Baruah said, "We are raising our TP's for Buy-rated WDC and STX to $125 (47% appreciation) and $70 (36% appreciation), respectively, as we believe both structural industry GM dynamics and ultimate EV/FCF valuation remain dramatically underappreciated; we expect ongoing margin expansion to continue altering investors' valuation mosaic."

"Our broader industry Gross Margin framework suggests GM expansion of 100-200 bps over the next few years (and perhaps 400-500 bps next 5-7 years), vs. a consensus view of secularly declining margins. Our "simplistic" view is that in a normalized TAM environment of flat to down annually, ex-potential Hitachi integration cost savings (which we don’t model and could add ~$1.70 to CY15 EPS of $8.64) that WDC can appreciate 50%, and that after exiting CY14 with shares at 279M, STX generates $7.00+ in CY15 EPS," added the analyst.

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 $82.10 yesterday.




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Analyst Comments, Analyst EPS View, Analyst PT Change

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