What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 3.5% in the afternoon session after 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.
After the initial pop the shares cooled down to $85.55, up 4.4% from previous close.
Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
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 12 days ago when the stock gained 3.5% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Western Digital is up 38.3% since the beginning of the year, and at $85.55 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 $2,269.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
