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Western Digital Corp WDC

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

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Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Western Digital Beats Market Expectations Despite Data Center Doldrums; Maintain $53 FVE

Analyst Note

| William Kerwin |

No-moat Western Digital reported strong fiscal second-quarter results, with both the top and bottom lines exceeding the FactSet consensus estimates by a healthy margin. Like the previous quarter, robust demand for notebooks, desktops, and retail products buoyed the firm's top and bottom lines. The company's relationships with major PC OEMs also helped drive a record level of exabyte shipments. On the other hand, however, the company saw revenue from its data center vertical plummet due to delays in cloud titan qualification. We are maintaining our $53 fair value estimate for Western Digital. With the company's share price up 11% after hours to $58, we recommend investors wait for a pullback before committing new capital to the name.

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Company Profile

Business Description

Western Digital is a leader in the hard disk drive and flash markets. The company develops, manufactures, and provides data storage solutions to consumers, businesses, and governments. The company’s product portfolio includes hard disk drives, solid-state drives, and public and private cloud data center storage solutions. Western Digital’s SanDisk acquisition positions the company as a broad-based provider of media-agnostic storage solutions.

Contact
5601 Great Oaks Parkway
San Jose, CA, 95119
T +1 408 717-6000
Sector Technology
Industry Computer Hardware
Most Recent Earnings Dec 31, 2020
Fiscal Year End Jul 3, 2021
Stock Type Cyclical
Employees 63,800

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