Shares of Lake Forest-based Western Digital Corp. rose more than 7% Friday after an analyst predicted stable prices for disk drives in coming months.
Western Digital has a market value of $2.7 billion.
Dinesh Moorjani of Old Greenwich, Conn-based American Technology Research Inc. upgraded shares of Scotts Valley-based Seagate Technology LLC, the No. 1 disk drive maker and key rival to Western Digital, the second-largest drive maker.
Shares of Seagate were up 11% with Western Digital rising in tandem.
Shares of Seagate are off about 80% in the past year, while Western Digital is off 60%.
Both are down on fears about lower demand in an industry known for profit-killing price wars in times of oversupply.
The industry is in for more falling prices, according to Moorjani, who cut his profit outlook for Seagate for the 12 months through June.
But Seagate’s beaten down stock already reflects that the prospect of prices falling further, he said.
Seagate and Western Digital have cut capital spending and production to bring down their supplies of unsold drives. That should stabilize prices, he said.
Last month, Western Digital said it was cutting 2,500 jobs and halted production for two weeks.
