Analyst Aaron Rakers of Wells Fargo assigned a Buy rating on Western Digital (WDC – Research Report), with a price target of $72.00.
Aaron Rakers has given his Buy rating due to a combination of factors surrounding Western Digital’s proactive approach to corporate restructuring and leadership appointments. The company is on track to complete the separation of its HDD and Flash businesses by the second half of 2024, which is an indicator of strategic focus and potential for increased efficiency. The designation of experienced executives to lead the separated entities, including the appointment of David Goeckeler as CEO of the Flash company and Irving Tan as CEO of the HDD company, underscores a commitment to strong leadership and sector-specific expertise. This is seen as a positive move that can drive growth and operational success in each standalone business.
Additionally, the recent sale of a majority equity interest in SanDisk Semiconductor (Shanghai) for approximately $624 million is a strategic divestiture that could optimize the company’s portfolio and strengthen its balance sheet. Rakers likely considers these actions, along with the positive sentiment from recent investor meetings where recovery in HDD and Flash pricing was discussed, as evidence of a solid path back to 30%+ gross margins. The potential for strategic partnerships or merges, such as the speculated alliance with Kioxia, also presents a favorable outlook for Western Digital, adding to the rationale behind the Buy rating.
In another report released on March 4, Bank of America Securities also maintained a Buy rating on the stock with a $70.00 price target.
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Western Digital (WDC) Company Description:
Western Digital Corp. engages in the development, manufacture, market and sale of data storage devices and solutions. It operates through the following product categories: client devices, data center devices and solutions, and client solutions. The client devices category includes mobile, desktop, gaming and digital video hard drives, solid state drives (SSDs), embedded products, and wafers. The data center devices and solutions category covers capacity and performance enterprise hard disk drives (HDDs), enterprise SSDs, data center software, and system solutions. The client solutions category offers removable products, hard drive content solutions, and flash content solutions. The company was founded by Alvin B. Phillips in 1970 and is headquartered in San Jose, CA.
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