CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We adjust our 12-month target by $1 to $47 on a P/E of 9.8x our FY 2025 EPS view, within historical forward averages. We widen our FY 2024 loss per share estimate to -$3.28 from -$3.12 and lower our FY 2025 EPS view to $4.76 from $5.34. WDC posted Sep-Q EPS of -$1.76 vs. -$1.98, beating consensus by $0.14. Sales fell 26% on sharp HDD (-41%) and flash memory (-10%) declines. Gross margins expanded 0.2%-pts to 4.1%, which included an 8.5%-pt headwind from underutilization charges ($225M) and other one-time charges ($9M). We view WDC’s decision to spin off its Flash business into a separate public company as a strategic positive that should unlock shareholder value, as each entity will be able to optimize its operations and advance growth plans tailored to its respective market. We also see tailwinds for WDC’s HDD and Flash revenues from normalizing storage demand, higher per-unit flash content driven by AI and 5G, and an impending cyclical rebound in NAND flash as prices stabilize.