Summit Insights Downgrades Western Digital Corp. (WDC) to Hold, 'further improvements to profitability are now limited'
Summit Insights analyst KinNgai Chan downgraded Western Digital Corp. (NASDAQ: WDC) from Buy to Hold.
The analyst comments "We believe the storage industry has emerged from the cyclical downturn and is now entering a moderate supply constraint phase, triggering industry buyers to make strategic buys to guarantee supply. WDC has now seen ASP grow to mid-teen percent for three consecutive quarters and gross margin expand from a low single-digit percentage to the mid-30. While we think there remains some room for gross margin to expand further, we think the storage and flash industry is in the 7th to 8th inning of the recovery cycle. Thus, we are downgrading WDC to a HOLD as we believe further improvements to profitability are now limited."
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Shares of Western Digital Corp. closed at $67.05 yesterday.