Computer storage media are perhaps more vital now than at any other time in history. With decades of media now available, keeping it all in one place is a premium application. Meanwhile, Western Digital (NASDAQ:WDC), a leader in computer storage, is taking a beating in the market after a downgrade at Goldman Sachs (NYSE:GS).
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Goldman Sachs analyst Toshiya Hari cut his projection on the company from Neutral to Sell. He also cut the company’s price target from $43 to $31. The biggest reason? A downturn in the memory industry in general, which Goldman Sachs described as “severe.” Further, Hari offered a note to investors pointing out that NAND memory is now priced below its “cash cost,” part of an attempt to reduce outstanding inventories in the middle of a PC market crunch.
Perhaps worst of all, Hari pointed out that the company’s balance sheet won’t help matters. Investors are likely to note the company’s current level of leverage, Hari noted, and that will limit Western Digital’s ability to come back following the latest downward cycle. However, there is a bright spot in all this: Hari looks for a comeback starting in 2024, along with a return toward normalcy in basic fundamentals.
Currently, the wider body of analysts find Hari’s perception somewhat extreme. Western Digital has a consensus analyst opinion declaring it a Moderate Buy, with Buy and Hold recommendations nearly equal. Hari is one of only two Sell ratings. In addition, the company has 30.14% upside potential thanks to its average price target of $42.53 per share.
