Western Digital (WDC) Stock Plunges 10% on Disappointing Outlook, Analysts Lower PTs

January 28, 2022 6:54 AM EST
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Price: $56.60 -1.29%

Rating Summary:
    27 Buy, 16 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 7 | Down: 9 | New: 42
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Shares of Western Digital (NASDAQ: WDC) sank 10% after the company reported mixed earnings results for the fiscal second quarter and an outlook that missed analyst consensus.

On an adjusted basis, WDC reported EPS of $2.30 on revenue of $4.83 billion for the quarter that ended on December 31, compared to analyst consensus of $2.13 in EPS on revenue of $4.82 billion.

As for the current quarter, the data storage company said it anticipates adjusted EPS to range between $1.50 and $1.80, well below the consensus estimates of $1.94. WDC expects to generate $4.45 billion, vs the estimated $4.75 billion.

The company also announced the appointment of a new CFO, Wissam Jabre, who previously served as CFO at Dialog Semiconductor. Current CFO Robert Eulau "will remain with the company during an advisory period to ensure a seamless transition," WDC said in a press release.

Rosenblatt analyst Kevin Cassidy reiterated a Neutral rating and a $56.00 per share on WDC stock.

“Western Digital's supply chain woes are expected to recover in 2HC22. Until then, HDD material cost inflation, NAND Flash ASP pressure and customers' BOM shortages have revenue and earnings depressed in 1HC22. We'll remain on the sidelines while these issues are resolved,” Cassidy wrote.

Mizuho analyst Vijay Rakesh lowered the price target to $78.00 per share from the prior $83.00 amid soft guidance.

”WDC noted MarQ GM headwinds from 1) ~$70M Covid cost impacts to persist but decline into the MarQ, 2) higher Enterprise SSD component sourcing costs affecting Flash margins, and 3) supply chain constraints; but expects headwinds potentially improve into 2HC22… We believe WDC is attractive trading at ~40% discount to peer STX, with a positive memory cycle ahead, and its NAND business at negative EV/S and P/S,” Rakesh wrote in a report.

Western Digital stock price closed at $53.84 yesterday.

By Senad Karaahmetovic | [email protected]

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