Morgan Stanley Hikes Western Digital (WDC) Target to $78, Reaffirms Bullish View

Western Digital Corporation (NASDAQ:WDC) is one of the 20 undervalued momentum stocks that are taking off. Morgan Stanley analyst Erik Woodring, on June 17, reinforced his positive stance on Western Digital (WDC), raising the price target to $78 from $70 following recent discussions with company management. His Overweight rating remains unchanged, reflecting increased confidence in WDC’s earnings potential and strategic positioning in the HDD segment.

Woodring has revised his long-term EPS estimates upward by up to 10%, citing improvements in gross margin expectations, earlier-than-expected deleveraging, and more timely capital returns. He sees these developments as key factors for re-rating the stock in coming months.

A network engineer gazing intently at computer monitors, surrounded by servers and storage systems.

Back in May, the analyst had already raised his price target from $54 to $70. In the update, he had stated that Western Digital’s could substantially benefit from the surge in data center expansion. While the company still trails Seagate in HAMR technology, the analyst believes HDDs will continue to dominate the storage landscape, given the exponential growth in global data generation.

He also viewed WDC’s valuation as compelling, as it traded at a notable discount to peers with a PE of less than six times peak EPS. This underlines the stock’s potential upside, particularly if supported by continued strength in the HDD cycle, monetization of its SanDisk asset, and improved shareholder returns through potential dividend increases.

Western Digital Corporation (NASDAQ:WDC) is a leading developer and manufacturer of data storage devices and solutions. The company’s product range includes hard disk drives (HDDs), solid-state drives (SSDs), and external storage systems tailored for both consumer and enterprise markets.

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