What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 4.5% in the afternoon session after continued positive momentum as it received bullish commentary from Wall Street, including being named a 'Top Pick' by Morgan Stanley. Morgan Stanley analyst Erik Woodring raised the firm's price target on Western Digital to $99 from $92, reiterating an Overweight rating. This decision followed meetings with company executives, which increased the firm's confidence in Western Digital's technology roadmap.
After the initial pop the shares cooled down to $90.22, up 4.9% from previous close.
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What Is The Market Telling Us
Western Digital’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 3.5% on the news that Morgan Stanley named the stock its "Top Pick" with an overweight rating. The investment bank also set a price target of $99 for the stock. This positive view is supported by Western Digital's recent strong financial performance. The company recently reported fourth-quarter earnings of $1.66 per share on revenue of $2.61 billion, both of which surpassed analyst forecasts. Furthermore, Western Digital issued guidance for the upcoming September quarter that was also above consensus estimates, projecting revenue of $2.70 billion and earnings per share of $1.54, indicating expectations for continued business momentum.
Western Digital is up 45.8% since the beginning of the year, and at $90.22 per share, has set a new 52-week high. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $2,364.
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