Western Digital (WDC.O) Gains Momentum with Evercore's Outperform Rating and Business Simplification

Key Points

• Evercore ISI initiates coverage of Western Digital (WDC) with an Outperform rating and a price target of $80, indicating confidence in the company's growth.
• Western Digital's stock has been on the rise, with a 30% increase year to date and an 84% increase over the past 12 months.
• The company is expected to become 'less complicated' following its planned split into two distinct assets, which could drive further investor interest.

In this news

Western Digital Corporation (WDC) has seen its stock price inch higher following a positive assessment from Evercore ISI, which initiated coverage with an Outperform rating and set a price target of $80. The data storage company experienced a 1% rise in early market trading on Wednesday, continuing its upward trajectory with a 30% increase year to date and an 84% rise over the past 12 months. Evercore's analysts, including Amit Daryanani, cite a cyclical improvement in the digital storage market and a strategic simplification of Western Digital's business model as key factors for the optimistic outlook.

According to Evercore, the anticipated split of Western Digital into two distinct assets within the next two to three quarters is expected to make the company's story 'less complicated,' potentially attracting more investors. The firm also foresees a recovery and strengthening in both the hard disk drive (HDD) and flash memory (NAND) markets, with a particularly strong recovery year for NAND in CY24, despite expected market volatility. The HDD market is projected to grow by 25% during fiscal year 2025, driven by PC refresh cycles and smartphone demand.

While Western Digital (WDC) holds a HOLD rating from Seeking Alpha analysts and its quant system, Wall Street analysts are more bullish with a BUY rating. The company's upcoming business split and the positive market outlook for its core products suggest a potentially lucrative future for investors. However, the inherent volatility in the memory market remains a factor to watch closely.