Goldman Sachs Analyst Downgrades Western Digital Corp (WDC)

Goldman Sachs analyst, Mark Delaney, downgrades Western Digital Corp (NASDAQ:WDC) to a Sell rating with a price target of $38.

Delaney explains, “We see NAND margin risk from: 1) 2017 oversupply: We expect NAND capex to rise by 45-50% this year and create oversupply in 2017. 2) 3D yield risk: WD is behind Samsung in 3D NAND and trying to ramp quickly, which we believe creates yield risk. 3) Royalty: The Samsung royalty under the current agreement goes through 8/14/16 and we estimate is 8-9% of WD’s EBIT. WD will need to renegotiate this, and we expect at a lower rate. 4) China: Chinese companies are attempting to enter the NAND market. We also expect long term declines in HDD sales.”

According to TipRanks, Mark Delaney is ranked #886 of 4,071 analysts. He maintains a success rate of 59% and realizes an average return of 7.9%.



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