Western Digital slips as Benchmark cuts estimates in wake of new Micron spending woes
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Western Digital (WDC) slipped in premarket trading as Benchmark lowered its estimates for 2023 again after Micron Technology (NASDAQ:MU) said on Wednesday that the outlook for 2023 has continued to worsen.
Analyst Mark Miller, who has a sell rating and $28 price target on Western Digital (WDC), lowered his adjusted earnings per share estimates to 22 cents per share on $13B in revenue, down from a previous estimates of 76 cents and $13.4B in sales, respectively.
"Concerns over a weaker than expected recovery and its associated drain on Western Digitalâs cash position keep us at Sell," Miller wrote in a note to clients.
Western Digital (WDC) has $2.05B in cash, down from $2.33B in the June quarter and $7.1B in debt. The company's management has previously said that free cash flow could be negative in fiscal 2023 as the ongoing weakness in the economy impacts the semiconductor industry and more broadly, the tech sector.
Western Digital (WDC) shares fell fractionally to $36.34, but off their worst levels of the year. Competitor Seagate Technology (STX) rose 0.5% in premarket trading.
Late last month, Western Digital (WDC) reported third-quarter results that were mixed, with revenue coming in slightly ahead of estimates.