Goldman Sachs Comments on Western Digital's (WDC) Q3

Goldman Sachs maintained a Neutral rating on Western Digital Corp. (NASDAQ: WDC) an reduced its price target to $78.00 (from $79.00). Analyst Bill Shope noted healthy Q3 results, although guidance was "tepid."

"Western Digital reported non-GAAP EPS of $1.94, beating our estimate of $1.89 and consensus of $1.88. A lower than expected tax rate contributed $0.04 to the beat (versus our model), while a higher than expected share count presented a $0.01 headwind," said Shope.

"Like Seagate (NYSE: STX), WD believes that hyperscale customers are improving the efficiency at which they use storage capacity, and this contributes to the company’s muted near-term demand expectations. Unlike Seagate, however, WD did not observe notable inventory builds at traditional enterprise storage customers, which Seagate had highlighted as another headwind. The companies’ diverging views on the enterprise space add another layer of uncertainty to an already cloudy 2HCY2014 picture. We update our model to reflect this quarter’s report and demand commentary, modestly lowering our FY2014 – FY2016 estimates and our price target," he said.

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 $88.08 yesterday.

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