Shares of Lake Forest disk drive maker Western Digital Corp. slumped Thursday after an analyst downgraded the stock and that of its top rival, Seagate Technology.
Western Digital was down nearly 6% on a recent market value of about $6 billion.
Robert W. Baird & Co. analyst Jayson Noland cut his price target on Western Digital’s shares to $32 from $35, citing weakening industry conditions and lower prices, according to a report on Barrons.com.
Western Digital was hovering around $28 in midday New York trading.
Noland also lowered his rating on Seagate’s stock to “neutral” from “outperform” on concerns about the disk drive industry overall.
“Industry conditions have continued to worsen throughout the month of March,” he said in a research note to clients.
Noland said that disk drive prices have “come down more than we had anticipated.”
Earlier this month, both Seagate and Western Digital raised their outlooks for the quarter.
For the March quarter, Western Digital said it expects profits of $233 million to $246 million, up from its January estimate of $189 million to $202 million.
The company is looking for revenue of $2 billion to $2.07 billion, versus January’s outlook of $2 billion.
Western Digital’s stock has been on a tear lately,it has been up roughly 40% in the past year.
