Western Digital (NASDAQ:WDC) Trading Down 13% Following Analyst Downgrade

Shares of Western Digital Corporation (NASDAQ:WDC) fell 13% during mid-day trading on Thursday after Summit Insights downgraded the stock from a buy rating to a hold rating. The stock traded as low as $407.48 and last traded at $451.52. Approximately 16,092,301 shares were traded during mid-day trading, an increase of 79% from the average daily volume of 8,965,441 shares. The stock had previously closed at $519.17.

WDC has been the topic of a number of other research reports. Mizuho increased their price objective on Western Digital from $550.00 to $685.00 and gave the company an “outperform” rating in a report on Monday, June 8th. Citigroup lifted their price target on shares of Western Digital from $685.00 to $800.00 and gave the company a “buy” rating in a research report on Monday, July 13th. TD Cowen upped their price objective on shares of Western Digital from $325.00 to $500.00 and gave the stock a “buy” rating in a report on Friday, May 1st. Cantor Fitzgerald lifted their target price on shares of Western Digital from $660.00 to $900.00 and gave the stock an “overweight” rating in a report on Monday, June 29th. Finally, UBS Group cut their target price on shares of Western Digital from $560.00 to $525.00 and set a “neutral” rating for the company in a research report on Thursday. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat.com, Western Digital presently has an average rating of “Moderate Buy” and an average price target of $536.96.

Insider Activity

In other news, insider Vidyadhara K. Gubbi sold 2,475 shares of the business’s stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $556.24, for a total transaction of $1,376,694.00. Following the sale, the insider directly owned 85,154 shares in the company, valued at approximately $47,366,060.96. The trade was a 2.82% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, 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 transaction, the insider owned 114,539 shares of the company’s stock, valued at $60,663,290.57. The trade was a 0.70% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 5,093 shares of company stock worth $2,751,337. Company insiders own 0.18% of the company’s stock.

Key Stories Impacting Western Digital

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

• Positive Sentiment: Western Digital reported adjusted fourth-quarter earnings of $3.56 per share on $3.75 billion in revenue, exceeding consensus estimates of $3.31 EPS and $3.70 billion in revenue. Revenue increased 43.8% year over year, supported by cloud data-center and AI-related storage demand. Western Digital Q4 Earnings Beat as Revenue Jumps 44% on Cloud Demand
• Positive Sentiment: Management issued fiscal first-quarter 2027 revenue guidance of $4.0 billion to $4.2 billion and adjusted EPS guidance of $3.85 to $4.15, both above Wall Street expectations. Executives also said AI customers are negotiating storage capacity commitments extending through 2031, providing substantial long-term demand visibility. Western Digital Says AI Customers Are Already Negotiating Storage Deals Through 2031
• Neutral Sentiment: Analyst views were mixed. Robert W. Baird raised its price target to $630 and maintained a Buy rating, while Rosenblatt lowered its target to $800 but retained Buy; Summit Insights downgraded the stock from Buy to Hold. Western Digital also declared a $0.15-per-share quarterly dividend, although the approximately 0.1% yield is unlikely to materially affect the stock.
• Negative Sentiment: The main pressure point was fiscal first-quarter non-GAAP gross-margin guidance of 55% to 56%—a midpoint of 55.5%—which fell short of the higher profitability expectations set by Seagate’s recent results. Analysts viewed this as evidence that margin expansion may be stabilizing after a major rally. Western Digital Slumps Despite Q2 Beat as Analysts Highlight Peer Seagate’s Results
• Negative Sentiment: Investor expectations were unusually high after WDC’s shares had risen roughly threefold over the past year and AI-storage enthusiasm had driven the valuation higher. As a result, even an earnings beat and above-consensus revenue outlook were insufficient, prompting profit-taking and a broader selloff in storage and memory stocks.

Institutional Trading of Western Digital

Several institutional investors have recently made changes to their positions in the business. Stonehaven Wealth & Tax Solutions LLC bought a new stake in Western Digital in the second quarter valued at about $227,000. Silverlake Wealth Management LLC acquired a new position in Western Digital in the second quarter worth about $241,000. Private Advisory Group LLC bought a new position in Western Digital during the second quarter worth about $11,583,000. Focus Partners Advisor Solutions LLC bought a new position in Western Digital during the second quarter worth about $8,307,000. Finally, ABN AMRO Bank N.V. acquired a new stake in Western Digital during the second quarter valued at approximately $980,000. 92.51% of the stock is currently owned by institutional investors and hedge funds.

Western Digital Stock Down 13.0%

The company has a market capitalization of $155.63 billion, a price-to-earnings ratio of 26.96 and a beta of 2.14. The business has a fifty day simple moving average of $569.14 and a two-hundred day simple moving average of $415.61.

Western Digital (NASDAQ:WDC) last issued its earnings results on Tuesday, August 4th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.31 by $0.25. The business had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. Western Digital had a return on equity of 42.95% and a net margin of 55.29%.Western Digital’s quarterly revenue was up 43.8% compared to the same quarter last year. During the same period in the prior year, the firm posted $1.66 EPS. As a group, equities analysts predict that Western Digital Corporation will post 9.61 earnings per share for the current fiscal year.

Western Digital Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th will be paid a dividend of $0.15 per share. This represents a $0.60 annualized dividend and a yield of 0.1%. The ex-dividend date 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.