Stifel analyst Patrick Ho upgraded Western Digital to Buy from Hold with a price target of $73, up from $63. The selloff in the shares due to the concerns related to the coronavirus situation have created an attractive entry point, Ho tells investors in a research note. While the current coronavirus situation could impact near-term estimates, Western Digital's fundamental outlook for 2020 remains intact, contends the analyst. Ho believes structural demand remains intact and near-term issues are supply constrained.
Reports Q1 revenue $3.9B, consensus $3.83B. Client Devices increased 20%, Data Center Devices and Solutions revenue declined 26%, and Client Solutions declined 5% year-over-year. The company said, "While we are still managing through macro uncertainty, during the quarter we benefitted from strength particularly in the retail sector, driven by favorable macro and market dynamics, as well as the brand recognition of our products. Our diversified storage portfolio strategy implemented through our recently announced organizational structure will enable us to accelerate growth, improve our focus, and drive sustainable, long-term shareholder value."