Deutsche Bank Upgrades Western Digital Corp. (WDC) to Buy; 2H Recovery
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Deutsche Bank analyst Sidney Ho upgraded Western Digital Corp. (NASDAQ: WDC) from Hold to Buy with a price target of $60.00 (from $45.00).
Ho commented, "We are starting to observe favorable data points in both HDD and NAND that will support a solid 2H CY19 recovery for WDC's earnings. While we acknowledge there is downside risk to near-term EPS due to weaker-than-expected NAND pricing--and hence we lower our near-term EPS estimates--supply cuts across the NAND industry, along with a re-acceleration of nearline HDD demand, will likely lead to a stronger recovery off a lower base in 1H CY19. On the upcoming earnings call, we expect WDC management to highlight the improved visibility, which should be a positive catalyst for the stock. As earnings power starts to normalize and with upside risks for earnings revisions for 2H CY19 and CY20, the setup is favorable, in our view. Consequently, we upgrade our recommendation to Buy and raise our price target to $60."
Shares of Western Digital Corp. closed at $53.00 yesterday.
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