Western Digital Stock Hits 2-Year Low on Bear Notes

The firm cited slowing demand

Deputy Editor
Sep 20, 2022 at 10:56 AM
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Western Digital Corp (NASDAQ:WDC) stock is down 4.2% at $35.06 at last glance, after Deutsche Bank downgraded the stock to "hold" from "buy," with a price-target cut to $40 from $56. Though the firm doesn't see too much downside for the shares, it noted that slowing demand is taking its toll, and the outlook for the second quarter looks like it's "meaningfully below" analyst estimates. Barclays threw in a bear note this morning too, lowering its price target to $40 from $55. 

This negative price action has WDC extending yesterday's lows, hitting a fresh two-year bottom of $34.94. The stock has been moving choppily lower since June of 2021, and is has shed 46.1% since the start of 2022. It's also worth noting that the security's 14-day Relative Strength Index (RSI) rating of 19.6 sits firmly in "oversold" territory, meaning Western Digital stock could be due for a short-term bounce. 

Despite calls outnumbering puts on an absolute basis, Western Digital stock's 50-day put/call volume ratio of 0.91 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the elevated 91st percentile of its annual range. In other words, this suggests a very healthy appetite for long puts of late.

Of the 29 analysts in coverage, 16 now carry a "hold" or worse rating on WDC. The 12-month consensus price target of $56.57 is a roughly 60% premium to current levels. 

 

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