Western Digital (WDC): Takeaways From Analyst Day, Raising PT - Susquehanna

Susquehanna analyst, Mehdi Hosseini, reiterated his Positive rating on shares of Western Digital Corp. (NASDAQ: WDC) and raised the price target to $95 from $88 after a strong analyst day.

Key takeaways include:
1) Multiple cost/bit catalysts are on the horizon for WDC's 64-Layer (TLC) 3D NAND, highlighting its cost leadership
2) WDC is uniquely positioned as a vertically integrated storage solution provider for large cloud data centers - which the company estimates to be a $23B market by 2020 and we view as a call option for investors given that it's not reflected in L-T targets
3) WDC remains focused on de-levering the balance sheet, while unveiling more insight into its cash generation capability, which the analyst estimates at ~$3B in FY18, or an attractive ~12% FCF yield (FCF/EV)
4) the analyst believes WDC can comfortably exceed $10/share beyond CY18 if the company can execute on its Data Center strategy
5) WDC extended its licensing agreement with Samsung for 8 years, providing a high-margin royalty stream
6) WDC remains focused on maintaining leadership in its Helium-based HDD platform, announcing 12TB and 14TB drives

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 $63.85 yesterday.

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