If it’s Tuesday, then there must be a new analyst report about Lake Forest-based disk drive maker Western Digital Corp.
Prices for some disk drives are rising as supplies are shrinking, said Robert W. Baird & Co. analyst Jayson Noland in a note to clients on Tuesday.
That led Noland to upgrade his rating on Western Digital’s shares to “outperform” from “neutral.”
The rating change is the second in as many days for Western Digital, the No. 2 maker of disk drives for computers and consumer electronics, after Scotts Valley-based Seagate Technology LLC.
On Monday, Needham & Co. analyst Richard Kugele cut his rating on Western Digital from “strong buy” to “buy” based on concerns about an oversupply of drives lasting for the next few months and weak demand from PC makers.
(*For more,
read Monday’s Orange County Business Journal story.)
But the two analysts aren’t that far apart: Kugele said he also sees a rebound, possibly in the spring, after production cuts by Western Digital and Seagate.
Shares of Western Digital are down about 40% in the past year as drive makers have seen an oversupply of drives and falling prices as demand from PC and consumer electronics makers and consumers has slipped.
The company’s stock rose 3% in early trading but closed down almost 4% along with the rest of the market on a bad day for Wall Street with a market value of $3.6 billion.
Robert W. Baird’s Noland said he thinks drive makers cut production more than needed, which is raising prices for some drives despite still soft demand.
“We believe industry conditions have improved measurably over the last couple weeks as supply appears constrained for high-capacity desktop drives,” he said.
Noland also upped his rating on Seagate.
