On Thursday, Citi reaffirmed its Buy rating and $85.00 price target for Western Digital Corp. (NASDAQ:WDC), representing potential upside from the current stock price of $66.13. The endorsement follows recent remarks from Western Digital's management, who acknowledged facing greater pricing challenges at the start of the December quarter than initially anticipated.
According to InvestingPro data, WDC has demonstrated strong momentum with a 40.87% return over the past year, despite current industry headwinds. The management team, consisting of the CEO and CFO, discussed these issues during an investor conference, noting the volatility in the NAND industry, which is expected to persist over the next few quarters.
Western Digital's management also mentioned an expected mid-cycle correction in the flash memory sector. Citi had previously adjusted its own forecasts for the company on December 2, following a revision of the 2025 NAND Average Selling Price (ASP) growth forecast. The firm's current projections for the first quarter of the calendar year 2025 are below the consensus, taking into account the seasonal trends that consensus estimates appeared to overlook, and which the company also acknowledges.
Despite the current industry challenges, Citi's outlook remains positive, particularly with regard to the potential value to be unlocked from the anticipated spin-off. The company had previously indicated at broker conferences a week ago that while the NAND business is experiencing volatility, the calendar year 2025 still presents a favorable scenario due to limited capacity additions.
InvestingPro analysis reveals that Western Digital maintains a solid financial position with a current ratio of 1.47 and expects significant revenue growth of 31% in fiscal year 2025. Subscribers can access 6 additional exclusive ProTips and a comprehensive Pro Research Report for deeper insights into WDC's prospects.
Investors are watching Western Digital's strategic moves closely as the company navigates through the industry's pricing headwinds and volatility. With a market capitalization of $22.83 billion and a strong Piotroski score of 8, the company shows fundamental strength despite current challenges.
The firm's confidence in the long-term prospects of Western Digital is reflected in the steady price target, suggesting that the current market challenges are seen as temporary obstacles rather than permanent deterrents to the company's growth trajectory.
In other recent news, Western Digital Corp. has been navigating flash pricing challenges, with Evercore ISI maintaining an $85 price target on the company's stock. Despite these headwinds, the company's performance, particularly in the NAND business, exceeded low expectations, with revenue growth of 26.6% in the last twelve months. Citi maintained a bullish stance on Western Digital, adjusting the share price target to $85 from $87, despite a forecast update predicting a 2% year-over-year decline in the NAND Average Selling Price (ASP) growth for 2025. TD Cowen reaffirmed a Buy rating on Western Digital shares, following the company's announcement of an upcoming spin-off of its Flash business.
Western Digital reported significant growth in its fiscal first quarter of 2025, with revenue hitting $4.1 billion and earnings per share increasing to $1.78. The company also expanded its 2021 Long-Term Incentive Plan by 6 million shares. In related news, Lynx Equity Strategies identified Micron Technology (NASDAQ:MU) as a potential beneficiary of the recent martial law declaration in South Korea, leading to an increase in Korean memory prices.
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