Stifel analyst Patrick Ho downgraded Western Digital (WDC) to Hold from Buy with a $53 price target after resuming coverage of the name. The firm had a Buy rating on the shares before suspending coverage in July. The analyst sees some tailwinds for the company but has "some more fundamental questions" as it relates to Western Digital versus Seagate Technology (STX). The technology roadmaps in both hard disk drive and NAND flash need to be monitored, particularly as the competitive landscape drives their own technology roadmaps as well, Ho tells investors in a research note. He also questions Western Digital's operating model and whether it can rebound to its last cycle peak. Further, the company's high debt load could be restrictive, adds the analyst. Ho this morning also resumed coverage of Seagate with a Hold rating.

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Sees Q4 revenue $1.7B-$2.0B, consensus $1.85B

Reports Q3 revenue $1.66B, consensus $1.68B. "Seagate's March quarter revenue grew 6% and non-GAAP EPS more than doubled over the December quarter as we benefit from improving cloud demand, our strong operating discipline and price execution. This combination sets the foundation for a return to target margin performance as the markets recover," said Dave Mosley, CEO. "This constructive demand backdrop is well-timed as we prepare to ramp our Mozaic products, anchored by industry-leading HAMR technology. HAMR-based products offer compelling economic value for our customers and position Seagate to drive further financial performance gains, as well as capitalize on favorable long-term demand for mass capacity storage."