Analyst upgrade and rationale
Morgan Stanley has raised its price target on Western Digital Corp. (NASDAQ:WDC) to $306.00 from $260.00 while retaining an Overweight rating on the shares. The firm points to what it calls "sustainable pricing tailwinds" that it believes the market has not fully priced in, and it highlighted the expected pass-through of those pricing dynamics to margins and earnings per share.
Demand commentary and peer comparison
Analyst Erik Woodring said Western Digital "echoed very similar demand strength and visibility commentary as STX earlier this week," referencing commentary from competitor Seagate Technology. That comparison is central to Morgan Stanley's view that demand conditions are firmer than some market participants anticipate.
Financial forecasts and valuation scenarios
The investment bank increased its fiscal year 2027 earnings per share forecast by 20% to $17, and it cites that revision as the underpinning for the new $306 price target. Morgan Stanley also published an updated bull case for the stock of $437, indicating materially higher upside in an optimistic outcome.
Company results and other analyst activity
Western Digital reported a strong Q2 FY2026 quarter, posting earnings per share of $2.13 versus analysts' expectations of $1.91. Revenue for the period came in at $3.1 billion, which was 6.16% above estimates. Those results were specifically called out by other market participants: Goldman Sachs raised its price target on Western Digital to $220 from $165 while keeping a Neutral rating, citing the quarter and guidance that beat expectations.
Strategic arrangements and cash commitments
Separately, Western Digital's joint venture arrangements with KIOXIA through the SanDisk partnership have been extended, with the agreement now set to expire on December 31, 2034. As part of that extension, SanDisk will make aggregate payments totaling $1,165 million to KIOXIA, scheduled in installments from 2026 through 2029. The extension and scheduled payments were noted in the same set of developments that accompanied the quarterly results.
Note: This article presents the facts and analyst commentary as reported; it does not provide investment advice.