Noble Financial affirms its Buy rating and $114 price target on Western Digital (Nasdaq: WDC) ffollowing Q2 results reported Tuesday night.

Analyst Mark Miller made the following observations and key points:

• Reported 2QFY15, non-GAAP net income of $2.26 per diluted share was upside by 16 cents to investor expectations, while December quarter sales of $3.89 B were upside by $50 M; lower SG&A and a lower tax rate contributed to the upside results
• Non-GAAP margins of 30.5 percent represented a sequential and year-over-year improvement of 40 bpts; supported by a higher mix, drive ASPs were up $2 sequentially and flat yearover-year to $60
• Total drive shipments were down 5.7 percent sequentially from the 14 week September, 2014 quarter, but enterprise drive shipments were up 3.6 percent sequentially and 3.3 percent year-overyear; record SSD sales of $187 million represented a sequential improvement of 20 percent
• While we see normal seasonal softness in the March quarter and a flat June quarter, we see positive factors: improving enterprise hard and solid-state drive sales, and a mix shift away from PC drive sales to higher margin enterprise drives
• This mix shift in conjunction with a tightening component supply, which will require capital investment, is seen driving higher margins as we exit 2015; we see EPS growing 10 percent to $9.33 in FY16; as such, we remain at buy

For an analyst ratings summary and ratings history on Western Digital Corp. click here. For more ratings news on Western Digital Corp. click here.

Western Digital Corp. closed at $97.63 yesterday.