Unlocking Long-Term Growth: Analysts Assess Western Digital’s Resilience in a Challenging Pricing Landscape (NASDAQ: WDC)

Wall Street analysts have reassessed Western Digital Corp (WDC) after the company shared important updates, including its fourth-quarter results and the retirement of its CFO.

Wissam Jabre, the current CFO, will retire on February 28 as part of plans to separate the company’s Flash and HDD businesses. After this transition, Western Digital will begin searching for a new CFO.

The company expects second-quarter fiscal 2025 revenues to be between $4.20 billion and $4.40 billion, with adjusted earnings per share (EPS) at the low end of the earlier guidance of $1.75 to $2.05. This downturn is mainly due to tougher pricing challenges in the NAND market.

• Cantor Fitzgerald has given Western Digital an Overweight rating, targeting a price of $95.
• JPMorgan does not currently have a rating for the company.
• Barclays also maintains an Overweight rating but reduced its price target from $90 to $80.
• Benchmark has a Hold rating on Western Digital.
• BofA holds a Buy rating with an increased target of $84 from $80.
• Morgan Stanley keeps a Buy rating with a target of $93.

Analysts expressed that the guidance update was not as bad as originally feared, but they cautioned that challenges remain. For instance, Cantor Fitzgerald’s analyst, CJ Muse, anticipates the EPS for March to be closer to $1.20, while the current consensus is at $1.58.

The CFO’s departure raises concerns about continuity in management, although analysts suggest this is more about new opportunities for Jabre rather than issues within the company. Jabre will stay on until February 28, creating a timeline for the upcoming split.

In terms of financial projections, Muse predicts second-quarter revenue of $4.18 billion and EPS of $1.72. Meanwhile, JPMorgan expects the December quarter results to hit the midpoint of guidance at $4.2 billion, with EPS anticipated on the lower end due to pricing challenges in NAND.

Overall, analysts expect some recovery in NAND pricing and demand as we move further into 2025, especially as inventory levels decline and AI technology drives storage demand.

As for the stock, Western Digital’s shares rose 2% to $65.54 as of the latest update.

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