Western Digital Corp

WDC: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$31.00	Pwr	Sfskgsls

Western Digital Earnings: Improving Pricing Drives Stellar Margin Performance as We Raise FVE 15%

William Kerwin ,

Aug 1, 2024

We increase our fair value estimate for no-moat Western Digital to $60 per share from $51, as we lift our medium-term growth and profitability estimates to reflect a stronger cyclical recovery over the next two years. During the June quarter, both hard disk drive and solid-state drive sales grew sequentially because of rebounding demand and favorable pricing. We are also impressed by Western Digital’s profitability as the firm continues to reap the benefits of improving pricing in the upcycle. We expect strong pricing to continue through calendar 2024, but settle at lower, normalized levels in the long term. We now see shares as fairly valued.

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