Tuesday, Mizuho sustained its optimistic stance on Western Digital Company (NASDAQ:), rising the inventory’s worth goal to $80 from the earlier $66 whereas sustaining a Purchase ranking on the shares. The agency acknowledged potential pricing benefits and the potential worth to be gained from a derivative of the corporate’s NAND enterprise.
Within the announcement, the agency acknowledged that Western Digital is poised to learn from favorable pricing tendencies. The maintained outlook for the present quarter stays at $3.3 billion in income with $0.05 earnings per share, aligned with consensus estimates of $3.3 billion and $0.13 EPS.
Trying forward, the agency has adjusted its full-year 2024 income and earnings estimates upward, from $12.7 billion and $2.00 per share to $12.8 billion and $1.58 per share, surpassing the consensus projections of $12.4 billion in income and $1.55 EPS. The forecast for fiscal 12 months 2025 has additionally been upgraded, with income now anticipated to succeed in $17.1 billion from the earlier $16.3 billion and earnings per share anticipated to leap from $4.84 to $6.56, once more outperforming consensus estimates of $16.2 billion in income and $5.85 EPS.
Furthermore, the agency’s projections for fiscal 12 months 2026 recommend a slight enhance in income, from $18.2 billion to $18.3 billion, and a extra vital rise in earnings per share from $6.48 to $6.82, in comparison with the consensus of $17.5 billion in income and $6.03 EPS.
The revised worth goal of $80 relies on roughly 1.5 occasions the agency’s June 2025 estimated price-to-sales ratio, up from the prior a number of of about 1.3 occasions. This valuation stays conservative relative to Western Digital’s peer Seagate Expertise, which trades at roughly 2.2 occasions its gross sales.
The agency additionally famous that even with the NAND trade’s optimistic momentum, the brand new goal remains to be cautious in comparison with a possible sum-of-parts valuation of round $85 following a derivative.
InvestingPro Insights
Western Digital Company (NASDAQ:WDC) has been the topic of bullish sentiment, as mirrored in Mizuho’s latest worth goal enhance and Purchase ranking. Complementing this outlook, InvestingPro information reveals a market capitalization of $23.82 billion and a difficult P/E ratio standing at -10.06, indicating that the inventory isn’t buying and selling on earnings however quite on different elements reminiscent of market sentiment and future development prospects. The income for the final twelve months as of Q2 2024 is reported at $11.26 billion, with a notable decline of -28.54% from the earlier interval, suggesting that whereas optimism is current, the corporate faces vital headwinds.
Two InvestingPro Ideas spotlight key issues for buyers: Firstly, seven analysts have revised their earnings upwards for the upcoming interval, signaling potential confidence within the firm’s prospects. Secondly, the inventory’s latest efficiency signifies a robust return over the past 12 months with a 107.54% worth complete return, which can intrigue growth-focused buyers. Nonetheless, it is essential to notice that the corporate has not been worthwhile over the past twelve months, which could possibly be a trigger for warning.
For buyers in search of a extra complete evaluation, there are over 10 extra InvestingPro Ideas accessible that delve deeper into Western Digital’s monetary well being and market place. These focused on accessing these insights can use the coupon code PRONEWS24 to get a further 10% off a yearly or biyearly Professional and Professional+ subscription at InvestingPro.
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