Western Digital Corp. (NASDAQ:WDC) stock surged Friday, extending a rally across memory and storage stocks after Sandisk Corp. (NASDAQ:SNDK) outlined an upbeat multiyear financial outlook.
The gains came as broader markets pointed higher. Nasdaq futures rose 0.20%, while S&P 500 futures gained 0.08%.
Sandisk Outlook Lifts Storage Stocks
On Thursday, Sandisk stock surged after the company outlined targets that included an adjusted gross margin of about 80% and an adjusted free cash flow margin of roughly 50%.
The company also plans to return 100% of excess cash to shareholders after investing in the business. The outlook strengthened expectations that favorable industry conditions could support storage companies such as Western Digital.
Technical Analysis
Western Digital remains in a bullish long-term trend. The stock trades about 45% above its 200-day simple moving average of $347.81. It is also about 5% above its 100-day SMA of $481.14.
However, the near-term picture is less clear. Shares trade about 9% below the 50-day SMA of $554.12 but remain above the 20-day SMA of $497.38.
The relative strength index stands at 47.16. That neutral reading suggests neither buyers nor sellers have firm control.
The 20-day SMA remains below the 50-day SMA, signaling short-term weakness. However, the 50-day SMA remains above the 200-day SMA, supporting the longer-term bullish trend.
Key resistance sits near $576.50. Support stands around $430.50.
Analyst Outlook
The stock carries a Buy consensus rating with an average price forecast of $649.79.
Recent analyst actions include Citigroup maintaining a Buy rating while lowering its price forecast to $740 on Aug. 7. TD Cowen maintained a Buy rating and raised its forecast to $540 on Aug. 6. UBS maintained a Neutral rating and lowered its forecast to $525 on Aug. 6.
Top ETF Exposure
Western Digital has a 4.90% weighting in the State Street SPDR Bloomberg Convertible Securities ETF (NYSE:CWB). It also accounts for 6.73% of the Alger 35 ETF (NYSE:ATFV) and 5.28% of the Fidelity Cloud Computing ETF (NASDAQ:FCLD).
Because Western Digital has meaningful weightings in these funds, ETF inflows and outflows can contribute to buying or selling pressure in the stock.
Benzinga Edge Rankings
Western Digital has a Momentum score of 99.29 and a Quality score of 95.72, according to the Benzinga Edge scorecard. Those readings point to strong price momentum and underlying quality.
However, its Value score stands at 6.56, while its Growth score is 16.84. Those weaker readings could put more focus on execution and future earnings growth.
Overall, Western Digital’s Edge scores show strong momentum and quality but weaker value and growth characteristics.
WDC Stock Price Activity: Western Digital shares were up 3.38% at $503.78 during premarket trading on Friday, according to Benzinga Pro data.
Image via Shutterstock
Login to comment