WDC - Western Digital's results unlikely to cause 'significant' sentiment shift: Wells Fargo

2023-05-09 07:30:32 ET

Western Digital's ( WDC ) third-quarter results and upcoming guidance is unlikely to cause a "significant" shift in sentiment, Wells Fargo said, amid continuing concerns about the storage market.

Analyst Aaron Rakers, who has an overweight rating and per-share price target of $55 on Western Digital ( WDC ) shares, noted that there is still a lack of interest from investor amid a "persisting" severe downturn in the flash and hard disk drive markets.

Rakers also noted that the company's guidance includes as much as $240M in underutilization charges for HDD and flash, with HDD revenue likely to decline sequentially due to the ongoing inventory correction, while NAND flash declines sequentially, even as "modest" bit growth is offset by average selling price declines.

However, there are signs of a "meaningful" second-half recovery, including the ramp of the company's 26TB UltraSMR, Rakers added.

Western Digital ( WDC ) expects fiscal fourth-quarter revenue to be in the range of $2.40B to $2.6B, well below the $2.83B consensus. It also expects to lose between $1.90 and $2.20 per share on an adjusted basis, well below the adjusted loss of $1.56 per share analysts were expecting.

Western Digital ( WDC ) shares were up 2.4% in pre-market trading following the results, while competitor Seagate Technology ( STX ) slipped fractionally.

More on Western Digital and storage

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