Deutsche Bank Resumes Western Digital Corp. (WDC) at Hold

Deutsche Bank analyst Sidney Ho resumes coverage on Western Digital Corp. (NASDAQ: WDC) with a Hold rating and a price target of $45.00.

The analyst commented, "WDC is committed to the HDD business, but it is also hedging against SSD encroachment through the acquisition of SanDisk. With NAND/SSD accounting for ~50% of revenues, WDC has enjoyed the upswing in NAND prices/margin in the past two years, as margins of its SSD business peaked at 57% in the Dec-17 quarter. However, the recent decline in NAND prices will likely make it very difficult for EPS growth in the next few quarters. We also believe investors underestimate the downside of NAND margin compression (DBe trough at ~25% in Jun-19E). Given risks of further estimate cuts, we believe WDC's current valuation is close to being fair. Our price target of $45 is based on ~6.5x CY20E EPS, noting WDC's leverage could increase to ~4x in 2019E as EBITDA declines."

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 $40.97 yesterday.

You May Also Be Interested In

• Western Digital (WDC) Tops Q3 EPS by 42c; offers guidance
• Accolade Inc. (ACCD) PT Lowered to $13 at Needham
• Raymond James Upgrades Kratos Defense & Security (KTOS) to Strong Buy