Western Digital Downgraded as Guidance ‘Well Below Expectations’ – Benchmark
2022.08.08 18:13
Western Digital (WDC) Downgraded as Guidance ‘Well Below Expectations’ – Benchmark
By Sam Boughedda
On the back of its earnings release last week, Western Digital (NASDAQ:WDC) shares have been downgraded to Hold from Buy by a Benchmark analyst on Monday.
The analyst, who did not assign a price target, told clients in a research note that the company posted upside June results, but the “September quarter guidance was well below expectations.”
“Western Digital’s F4Q22 non-GAAP earnings of $1.78 per diluted share were $0.08 upside to investor expectations while sales of $4.53 billion were within company guidance and $10 million upside to investor expectations. COVID costs impacted sales by $35 million to $40 million,” said the analyst.
The analyst added that a “sharp inventory correction is underway in the client segment impacting both HDDs and flash.”
Coupled with softening macro conditions, we believe the inventory reset will take a couple of quarters. While we see a somewhat limited downside for the shares from the current level, we move to Hold,” concluded the Benchmark analyst.
Western Digital shares gained 2% Monday morning.
