Western Digital Gets Target Cut Despite Strong Earnings(EDIT1)
TD Cowen cut its price target on Western Digital (WDC) to $430 from $540, citing valuation adjustments despite strong Q1 earnings and upbeat outlook. Revenue rose 55.3% YoY to $4.38B, beating estimates. Adjusted EPS was $4.64, above forecasts. The company expects $5.80 EPS for Q2, 20% higher than estimates. WDC plans increased capital spending for capacity expansion.
How this was made
The 30-second read
Why it matters
The earnings beat and guidance raise expectations for storage demand, especially HDDs, which remain cost‑effective versus SSDs.
Market read
Strong earnings and guidance could spark buying interest in WDC and lift related storage equipment stocks.
What to watch
Potential supply chain constraints and execution risk of the $2.3 B capex plan through 2028.
Background
Western Digital reported a 55% YoY revenue increase and raised its EPS outlook, prompting TD Cowen to adjust its valuation multiple.
Ticker impact
TD Cowen cut its target to $430 after Western Digital posted strong Q1 results and raised Q2 EPS guidance to $5.80, beating expectations.
likely upward pressure as the market prices in the higher guidance and robust revenue growth
Revenue jumped 55% YoY, EPS beat, and Q2 EPS guidance is 20% above consensus, which typically drives buying interest.
Market effects
Positive for the broader storage and data center hardware sector as higher HDD pricing may lift peers.
U.S. technology stocks could see modest gains on the earnings beat.
Limited to global storage equipment manufacturers and cloud providers.
Counterpoint
The target cut signals valuation discipline; investors may be cautious about aggressive capex spending.
Key entities
- companyWestern Digital
U.S. data storage hardware manufacturer (NASDAQ:WDC).
- analystTD Cowen
Equity research firm that issued the target revision.
