Western Digital (NASDAQ:WDC) Shares Down 3.8% on Analyst Downgrade

Western Digital Corporation (NASDAQ:WDC) was down 3.8% on Friday after Citigroup lowered their price target on the stock from $800.00 to $740.00. Citigroup currently has a buy rating on the stock. Western Digital traded as low as $422.50 and last traded at $434.30. 11,533,865 shares were traded during trading, an increase of 28% from the average session volume of 8,984,461 shares. The stock had previously closed at $451.52.

A number of other research firms also recently weighed in on WDC. UBS Group dropped their price target on Western Digital from $560.00 to $525.00 and set a “neutral” rating on the stock in a research note on Thursday. Barclays raised their price objective on Western Digital from $450.00 to $620.00 and gave the company an “overweight” rating in a research note on Wednesday, May 27th. Weiss Ratings upgraded Western Digital from a “buy (b-)” rating to a “buy (b)” rating in a report on Monday, July 13th. Cantor Fitzgerald increased their target price on Western Digital from $660.00 to $900.00 and gave the stock an “overweight” rating in a report on Monday, June 29th. Finally, Susquehanna lifted their price target on shares of Western Digital from $360.00 to $500.00 and gave the company a “neutral” rating in a research report on Wednesday, July 8th. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $534.56.

Insiders Place Their Bets

In other news, insider Cynthia L. Tregillis sold 808 shares of the company’s stock in a transaction on Tuesday, July 21st. The shares were sold at an average price of $529.63, for a total value of $427,941.04. Following the completion of the sale, the insider owned 114,539 shares in the company, valued at $60,663,290.57. This represents a 0.70% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bruce E. Kiddoo sold 750 shares of the business’s stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $528.52, for a total transaction of $396,390.00. Following the transaction, the director owned 3,903 shares in the company, valued at approximately $2,062,813.56. This trade represents a 16.12% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 5,093 shares of company stock valued at $2,751,337 in the last three months. 0.18% of the stock is currently owned by insiders.

Key Headlines Impacting Western Digital

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

• Positive Sentiment: Western Digital reported fiscal Q4 adjusted earnings of $3.56 per share on $3.75 billion in revenue, exceeding analyst estimates of $3.31 and $3.70 billion, respectively. Revenue increased 43.8% year over year, supported by AI-related cloud storage demand. Western Digital Stock Falls Despite Beating Earnings Estimates
• Positive Sentiment: Management projected fiscal Q1 2027 revenue of $4.0 billion to $4.2 billion and adjusted EPS of $3.85 to $4.15, both above consensus expectations. The company also cited pricing gains, higher-capacity products, and AI customers negotiating storage capacity through 2031, improving long-term demand visibility. WDC Q4 Earnings Call Highlights AI Storage Demand
• Positive Sentiment: Some analysts remain constructive. Baird assigned a Buy rating with a $630 price target, while the median target from 15 analysts is reported at $575, suggesting potential upside if growth and margins continue to improve. Analyst Assigns Buy Rating and Raises Price Target
• Neutral Sentiment: The stock’s decline reflects profit-taking after a substantial prior rally. Traders are also watching technical support levels and whether recent lows can stabilize.
• Negative Sentiment: Fiscal Q1 gross-margin guidance of 55% to 56%—a 55.5% midpoint—was viewed as insufficient relative to very high expectations and stronger margin performance from rival Seagate Technology. This raised concerns that Western Digital’s margin expansion may be moderating. Western Digital Slumps Despite Q2 Beat
• Negative Sentiment: Investors are rotating within semiconductor holdings toward AI networking leaders and away from traditional memory and storage names. In addition, reported insider activity shows 129 sales and no purchases over the past six months, which may weigh on sentiment, although such sales can reflect scheduled transactions.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the business. Paladin Partners LLC bought a new stake in shares of Western Digital during the 2nd quarter worth $160,000. Dunhill Financial LLC purchased a new stake in Western Digital during the second quarter worth about $29,000. Pallas Capital Advisors LLC purchased a new stake in Western Digital during the second quarter worth about $5,438,000. Performance Wealth Partners LLC bought a new stake in Western Digital in the second quarter worth about $71,000. Finally, Deutsche Bank AG bought a new stake in Western Digital in the second quarter worth about $885,565,000. Hedge funds and other institutional investors own 92.51% of the company’s stock.

Western Digital Price Performance

The stock’s 50 day simple moving average is $567.55 and its two-hundred day simple moving average is $417.23. The stock has a market capitalization of $149.69 billion, a PE ratio of 17.94 and a beta of 2.14.

Western Digital (NASDAQ:WDC) last issued its quarterly earnings results on Tuesday, August 4th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 50.22%. The company had revenue of $3.75 billion during the quarter, compared to analyst estimates of $3.70 billion. During the same quarter last year, the business posted $1.66 EPS. Western Digital’s quarterly revenue was up 43.8% compared to the same quarter last year. As a group, equities research analysts predict that Western Digital Corporation will post 17.77 earnings per share for the current fiscal year.

Western Digital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th will be given a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. The ex-dividend date of this dividend is Tuesday, September 8th. Western Digital’s dividend payout ratio is currently 3.58%.

Western Digital Company Profile

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.