Western Digital (NASDAQ:WDC) Shares Up 3.4% – Should You Buy?

Shares of Western Digital Corporation (NASDAQ:WDC) were up 3.4% during trading on Tuesday. The company traded as high as $366.00 and last traded at $364.32. 8,309,409 shares were traded during mid-day trading, a decline of 4% from the average daily volume of 8,638,048 shares. The stock had previously closed at $352.21.

Western Digital News Summary

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Analysts expect approximately $4.08 in EPS and $4.14 billion in revenue. Western Digital’s recent earnings history, including a prior revenue increase of 43.8% year over year and an EPS beat, has led some analysts to anticipate another upside surprise. Why Western Digital Is Poised to Beat Earnings Estimates Again
• Positive Sentiment: Hard-drive supply remains tight, supporting elevated pricing. Bank of America raised its WDC price target to $800 and maintained a Buy rating, while broader analyst targets remain well above the current trading level. BofA Lifts Western Digital Target
• Positive Sentiment: AI-related data-center expansion is increasing demand for high-capacity HDDs, and Morgan Stanley has said it would be an aggressive buyer of Western Digital and Seagate shares if results and guidance are strong. Morgan Stanley on Seagate and Western Digital
• Neutral Sentiment: Analysts have revised forecasts and price targets ahead of earnings, but estimates vary significantly. One valuation model trimmed fair value from $664.92 to $650.67, reflecting a balance between strong HDD and AI-storage demand and execution concerns. Western Digital Fair Value Trim
• Negative Sentiment: Western Digital shares remain well below their 52-week high after a steep decline from June’s peak. Investors may demand strong guidance to regain confidence, particularly as the stock trades below its 50-day and 200-day moving averages.
• Negative Sentiment: Key risks include possible data-center spending reductions, increased competitor supply, execution challenges during the HAMR technology transition, and uncertainty over future capacity growth. Morgan Stanley also lowered its WDC target to $643 from $676. Morgan Stanley Revises Western Digital Target
• Negative Sentiment: Reported insider activity is heavily weighted toward selling, with no insider purchases and numerous sales during the past six months. This may add to investor caution, although the transactions do not necessarily indicate deteriorating fundamentals.

Analyst Ratings Changes

A number of analysts recently weighed in on the stock. Robert W. Baird set a $630.00 price target on shares of Western Digital in a research report on Thursday, August 6th. UBS Group lowered their price target on Western Digital from $525.00 to $470.00 and set a “neutral” rating for the company in a report on Monday, October 12th. Citigroup cut their price objective on Western Digital from $800.00 to $740.00 and set a “buy” rating on the stock in a research report on Friday, August 7th. Wall Street Zen upgraded Western Digital from a “buy” rating to a “strong-buy” rating in a research note on Saturday, October 17th. Finally, Melius Research set a $1,050.00 price objective on Western Digital and gave the stock a “buy” rating in a research note on Monday, June 29th. One investment analyst has rated the stock with a Strong Buy rating, twenty have issued a Buy rating and seven have issued a Hold rating to the company’s stock. Based on data from MarketBeat, Western Digital currently has a consensus rating of “Moderate Buy” and an average price target of $609.56.

Western Digital Stock Up 3.9%

The firm’s 50 day moving average price is $438.14 and its two-hundred day moving average price is $480.05. The firm has a market capitalization of $141.68 billion, a PE ratio of 15.63, a P/E/G ratio of 1.54 and a beta of 2.11.

Western Digital (NASDAQ:WDC) last announced its earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.31 by $0.25. Western Digital had a return on equity of 48.15% and a net margin of 72.95%. The business had revenue of $3.75 billion for the quarter, compared to analyst estimates of $3.70 billion. During the same period in the previous year, the company earned $1.66 earnings per share. The company’s revenue for the quarter was up 43.8% compared to the same quarter last year. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. On average, sell-side analysts anticipate that Western Digital Corporation will post 19.65 earnings per share for the current fiscal year.

Western Digital Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th were paid a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital’s dividend payout ratio (DPR) is 2.48%.

Insider Buying and Selling at Western Digital

In other news, CEO Irving Tan sold 20,000 shares of the firm’s stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the completion of the sale, the chief executive officer owned 575,966 shares of the company’s stock, valued at approximately $256,287,591.02. This trade represents a 3.36% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Cynthia L. Tregillis sold 1,007 shares of Western Digital stock in a transaction on Thursday, August 27th. The stock was sold at an average price of $478.36, for a total transaction of $481,708.52. Following the completion of the sale, the insider owned 112,155 shares of the company’s stock, valued at approximately $53,650,465.80. This trade represents a 0.89% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 24,629 shares of company stock valued at $11,033,404 in the last three months. Corporate insiders own 0.20% of the company’s stock.

Institutional Trading of Western Digital

Several institutional investors have recently added to or reduced their stakes in the stock. Mowery & Schoenfeld Wealth Management LLC bought a new stake in shares of Western Digital in the 2nd quarter worth about $28,000. Dunhill Financial LLC acquired a new stake in shares of Western Digital in the 2nd quarter valued at about $29,000. Stonehage Fleming Financial Services Holdings Ltd bought a new position in shares of Western Digital during the second quarter worth about $31,000. Gables Capital Management Inc. bought a new position in shares of Western Digital during the second quarter worth about $32,000. Finally, Ares Financial Consulting LLC lifted its position in shares of Western Digital by 45.5% during the second quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider’s stock worth $51,000 after purchasing an additional 25 shares during the last quarter. 92.51% of the stock is owned by institutional investors and hedge funds.

About Western Digital

Western Digital Corporation (NASDAQ: WDC) is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.