will benefit from better cloud computing demand later this year, according to
The company is a leading maker of NAND flash memory, which is used in smartphones and solid-state drives. Western Digital also manufactures hard-drives.
The back story. Western Digital shares have rallied about 45% so far in 2019, in anticipation of a recovery in semiconductor demand later this year.
What’s new. Deutsche Bank analyst Sidney Ho raised his rating on Western Digital stock to Buy from Hold, predicting a rebound in demand during the back half of this year.
“We are starting to observe favorable data points in both HDD and NAND that will support a solid 2H CY19 recovery for WDC’s earnings,” he wrote. “On the HDD side, checks with the supply chain point to an earlier-than-expected recovery in cloud data-center purchases.”
The analyst said flash memory prices have declined by 20% to 25% in the first quarter and are down another 10% so far in the second quarter. But he believes a recovery will happen because competitors like Micron will cut manufacturing capacity.
Looking ahead. The analyst increased his price target for Western Digital stock to $60 from $45, representing 11% upside to the current stock price.
Western Digital stock was up 4.5% to $54.20 on Tuesday.
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