By Elsa Ohlen

Western Digital said its earnings will be at the lower end of its guidance, as analysts cut their price targets on shares of the data storage company.

Second quarter earnings will likely land at the lower end of the $1.75 and $2.05 range previously posted the company said late Thursday. Quarterly revenue is expected at the midpoint of the guidance range of between $4.20 billion and $4.40 billion. It cited a more challenging pricing environment in its flash memory business.

Shares were down 0.4% to $63.98 in premarket trading Friday, adding to a 4.6% loss over the past three months. The Nasdaq Composite is up 5.3% over the same period.

Western Digital develops, manufactures and sells data storage devices and solutions through its flash memory and hard disk drive segments, which it plans to split into two independent companies in 2025.

Bank of America analysts said Thursday that the spinoff will unlock "meaningful value," but near-term looks weak. They cut their price target to $80 from $89, maintaining a Buy rating.

In the past few days, Wells Fargo, Fox Advisors and Mizuho have also cut price targets on the stock. The average price target among the 25 analysts tracked by FactSet is now $88.

Last month, Benchmark analysts downgraded Western Digital shares to Hold from Buy on concerns of softer pricing and a slowdown in demand for industrial and automotive chips.

Western Digital will report second quarter fiscal results on Jan. 29.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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January 17, 2025 06:56 ET (11:56 GMT)

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