WDC - Western Digital shares nudge upward; Benchmark lifts rating on merger talk

Western Digital ( WDC ) shares edged up in pre-market trading Friday as Benchmark analyst Mark Miller raised his rating on the storage and memory tech company on reports that it has re-started merger talks with Japan's Kioxia.

Miller bumped up his rating on Western Digital ( WDC ) to hold from sell, largely on the grounds that its and Kioxia are discussing an even larger business combination. The two companies currently run a joint flash memory plant in central Japan.

Miller said that while the memory chip market may be headed toward recovering from what he called "one of the most severe downturns in years," there are still several factors that investors need to keep in mind that could delay a market rebound. Among those factors are expectations that PC, data center and mobile chips sales could still be depressed this year.

Kioxia was spun out from Toshiba, while Western Digital ( WDC ) said it was reviewing business options that could include spinning off its flash memory and hard disk drive businesses.

Western Digital ( WDC ) shares climbed more than 6% on Thursday as reports emerged about it holding merger talks with Kioxia.

Wall Street analysts have a consensus buy rating on Western Digital's ( WDC ) stock, while Seeking Alpha authors give the share a rating of hold. Seeking Alpha's Quant System, which historically outperforms the stock market, also gives Western Digital's ( WDC ) stock a rating of hold .

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