Western Digital Corporation (NASDAQ: WDC) has been downgraded from a “buy” rating to a “hold” rating by analysts at Wall Street Zen, according to a report published on February 2, 2024. This shift follows a series of mixed evaluations from other financial research firms regarding the company’s stock performance.
Analysts’ Ratings and Price Targets
In recent reports, various analysts have provided their insights into Western Digital’s stock. Evercore reaffirmed an “outperform” rating with a price target of $230.00 on January 16, while Barclays raised its price target from $240.00 to $325.00 on January 30. Morgan Stanley also increased its price objective from $260.00 to $306.00, rating the stock as “overweight.” New Street Research set a price target of $250.00 on February 3, and Wedbush reiterated an “outperform” rating with a target of $325.00 on February 9.
Currently, one analyst rates the stock with a Strong Buy, twenty have issued a Buy rating, and three have assigned a Hold rating. According to MarketBeat, the average recommendation for Western Digital is a “Moderate Buy,” with an average target price of $265.58.
Quarterly Performance Highlights
Western Digital recently reported its quarterly earnings on January 29, revealing earnings per share (EPS) of $2.13. This figure surpassed analysts’ expectations of $1.93 by $0.20. The company achieved revenue of $3.02 billion, exceeding the consensus estimate of $2.93 billion. Year-over-year, quarterly revenue experienced a significant increase of 25.2%, compared to the previous year, when the firm posted an EPS of $1.77. Analysts predict that Western Digital will report an EPS of $4.89 for the current fiscal year.
In terms of profitability, Western Digital demonstrated a net margin of 35.52% and a return on equity of 41.53%, indicating robust financial health amid fluctuating market conditions.
Insider Transactions and Shareholder Activity
In related news, CEO Irving Tan sold 20,000 shares of the company’s stock on February 2 at an average price of $255.44, totaling approximately $5.11 million. Following this transaction, Tan retains 623,586 shares in Western Digital, valued at around $159.29 million. This sale reflects a decrease of 3.11% in his holdings.
Additionally, Director Roxanne Oulman sold 1,800 shares on November 25 at an average price of $154.42, amounting to $277,956. After the sale, Oulman owns 3,863 shares valued at approximately $596,524, representing a decline of 31.79% in her ownership.
Over the past ninety days, insiders have sold a total of 70,522 shares worth $17.66 million, while corporate insiders hold 0.18% of the company’s stock.
Institutional Investment Trends
Numerous institutional investors have adjusted their positions in Western Digital recently. Notably, WCM Investment Management LLC acquired a new stake worth approximately $791.32 million in the third quarter. Norges Bank also purchased shares valued at $788.73 million in the fourth quarter.
Fred Alger Management LLC significantly raised its stake by 4,923.9% during the third quarter, now holding 3,407,042 shares valued at $409.05 million. Similarly, Soroban Capital Partners LP increased its holdings by 1,926.3%, owning 3,061,134 shares worth around $195.88 million.
Overall, hedge funds and institutional investors now control approximately 92.51% of Western Digital’s stock.
Western Digital, headquartered in San Jose, California, is a global leader in data storage, offering a wide range of products including hard disk drives (HDDs), solid-state drives (SSDs), and storage solutions for personal and enterprise applications. As the company navigates a challenging market, it continues to focus on innovation and customer needs in the data storage sector.
