Western Digital’s Strategic Buyback Signals Strong Market Confidence and Growth Potential

Morgan Stanley analyst Erik Woodring maintained a Buy rating on Western Digital (WDC – Research Report) yesterday and set a price target of $54.00.

Erik Woodring has given his Buy rating due to a combination of factors that highlight Western Digital’s strategic financial moves and market confidence. The company recently announced a $2 billion share buyback program, which is larger and earlier than anticipated. This move indicates strong confidence from management in the hard disk drive (HDD) market, suggesting a positive outlook for the company’s future performance.
Additionally, the buyback program, if executed over a three-year period, is expected to enhance earnings per share estimates by 2-3% from fiscal year 2026 to 2028. This potential increase in shareholder value, coupled with the company’s strategic capital allocation, supports the likelihood of Western Digital’s stock trading between the base case valuation of $54 and the bull case valuation of $74. These factors collectively reinforce the Buy rating, reflecting optimism about the company’s growth prospects and market positioning.

In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $62.00 price target.