Asiya Merchant, an analyst from Citi, reiterated the Buy rating on Western Digital. The associated price target remains the same with $200.00.
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Asiya Merchant has given his Buy rating due to a combination of factors that highlight Western Digital’s promising outlook. The company has shown increased visibility and confidence in demand and pricing stability, particularly in the enterprise business segment. This is supported by firm purchase orders with financial recourse through 2026 and commercial agreements extending through 2027, which include both enterprise business and pricing commitments. Additionally, Western Digital’s strong relationships with top hyperscalers, who are increasingly valuing storage as a critical component of AI infrastructure, provide a stable demand base.
Furthermore, the company is expected to benefit from sustained favorable supply and demand dynamics, which are anticipated to support stable pricing. The base-case expectation of a 25% compound annual growth rate in enterprise business is bolstered by recent trends indicating even higher growth rates. With strong free cash flow generation and the potential for additional debt reduction, Western Digital is well-positioned to improve shareholder returns. These factors collectively contribute to a favorable risk/reward profile, justifying the Buy rating and a target price of $200.
Merchant covers the Technology sector, focusing on stocks such as Western Digital, Pure Storage, and Hewlett Packard Enterprise. According to TipRanks, Merchant has an average return of 54.4% and an 80.25% success rate on recommended stocks.
In another report released on December 11, Morgan Stanley also maintained a Buy rating on the stock with a $188.00 price target.