Western Digital Corp Is Building Upside Momentum (WDC)

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Western Digital Corp’s (NASDAQ:WDC) higher fourth-quarter guidance and an improving technical picture make WDC stock look poised for more short-term gains.

Western Digital wdc stockThe market likes few things as much as a forecast hike. Just witness the sharp rally in Western Digital stock following a late-Wednesday media release.

The company, which makes hard drives and solid state memory chips, lifted its fourth-quarter revenue target to $3.46 billion, up from a prior forecast range of $3.35 billion to $3.45 billion.

Analysts on average are modeling Western Digital revenue to come in at $3.42 billion, according to a survey by Thomson Reuters.

The better-than-expected top-line growth — combined with stable margins — allowed WDC to hike its earnings outlook to 72 cents a share. That’s up from previous guidance of 65 cents to 70 cents a share and easily tops the Wall Street estimate of 68 cents a share.

WDC didn’t offer any more granular reasons for the improved outlook other than to say it reflected the integration of SanDisk, the acquisition of which closed last quarter. WDC will report full results at the end of the month.

Is WDC Stock Set to Stage a Breakout?

In another move the market applauded, WDC said that CFO Olivier Leonetti will step down on Sept. 1. He will be succeeded by Mark Long, currently the company’s chief strategy officer. From a statement by CEO Steve Milligan:

“The company is going through a strategic and organizational transformation with the integration of our HGST and WD subsidiaries as well as integrating the recently completed acquisition of SanDisk … As we build on our strategy-driven focus in a tightly integrated manner, it is the right time to combine the strategy and finance organizations and Mark Long is the right leader of this integrated team, with his extensive experience in financial and strategic planning.”

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On the technical front, WDC stock has now successfully tested support at its 50-day moving average twice in as many weeks after struggling with the key level for the better part of two years.

Additionally, this is a seasonally strong time for WDC stock. Shares have gained an average of 1.6% in July over the past decade.

As of this writing Dan Burrows did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/western-digital-wdc-stock/.

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