Why Is This Analyst Bearish On Western Digital And Sees Downside? - Western Digital (NASDAQ:WDC)

  • Benchmark analyst Mark Miller maintained a Sell rating on Western Digital Corp WDC with a $28 price target.
  • Miller held a conference call with WDC management. He remains concerned about the impact of the down cycle on Western Digital’s balance sheet. 
  • Overall, the industry continues to be rational in supply. 
  • Samsung Electronics Co, Ltd SSNLF continues to invest in NAND outside of China to replace NAND supply to Apple Inc AAPL due to U.S. restrictions on YMTC.
  • NAND pricing remains challenging, but the price declines this quarter will likely be lower than those reported in the September quarter. 
  • Western Digital has not seen it, but there could be some pockets of the market with irrational pricing. 
  • Western Digital’s hyper-scale customers are going through a digestion period that could last multiple quarters. 
  • Kioxia and Western Digital jointly determined wafer starts and spending. 
  • The recent cuts in client HDD will have no impact on head development. Overall, HDD nearline pricing has been benign. 
  • Western Digital has reduced its FY23 planned capex spending by 20% to 25%. 
  • The $1.1 billion in debt due in 2024 will likely be refinanced.
  • Price Action: WDC shares traded lower by 0.51% at $32.05 on the last check Friday.

Image and article originally from www.benzinga.com. Read the original article here.