Western Digital Corp Analyst Rating Update

Investing.com — Benchmark analysts have downgraded Western Digital Corp (NASDAQ:WDC) to a "Hold" on Thursday, citing several challenges that could impact the company’s fiscal performance in 2025.

Key Concerns

The firm outlines softening NAND pricing, weaker demand, and a shrinking market share as significant worries.

> “We see a growing number of concerns for Western Digital,” stated Benchmark, highlighting the softening NAND pricing due to customer inventory adjustments in consumer markets and a slowdown in industrial and automotive NAND demand.

Fiscal Year 2025 Forecast Adjustment

As a result of these pressures, Benchmark has lowered its FY25 forecast from $8.16 to $7.57 in non-GAAP net income per diluted share, with expected sales decreasing from $17.4 billion to $16.7 billion.

During a recent investor conference, CEO David Goeckeler indicated that the firm is facing more pricing headwinds than previously anticipated, which they expect to continue in the next quarter.

Competitor Analysis

Adding to Western Digital's challenges is weak guidance from competitor Micron Technology (NASDAQ:MU). Micron recently reported a sequential decline in NAND average selling prices (ASPs) and projected lower-than-expected bit shipments for its fiscal second quarter of 2025.

Micron’s projected fiscal Q2 EPS range of $1.33 to $1.53 fell short of the consensus estimate of $1.97, with sales forecasts of $7.7 billion to $8.1 billion well below expectations of $8.97 billion. Furthermore, Micron expects its NAND inventories to increase despite reducing supply and capital expenditures.

Market Share Decline

Western Digital's market share has also decreased from the mid-teens to 10.5% over the past three quarters. Benchmark attributes this decline to the company’s focus on consumer markets, which Micron does not expect to recover until late 2025.

With these growing concerns, Benchmark has adopted a more cautious stance, stating, "Growing FY25 concerns take us to Hold."