UPDATE: Stifel Nicolaus Reiterates Buy Rating, Raises PT on Western Digital Corporation Following Estimate Changes

In a report published Thursday, Stifel Nicolaus analyst Aaron Rakers reiterated a Buy rating on Western Digital Corporation WDC, and raised the price target from $75.00 to $77.00. In the report, Stifel Nicolaus noted, “We maintain our Buy rating and move our target price to $77 (was $75) given ongoing comfort in WD's consistent execution and ability to drive to a +$9/sh. EPS story. WD's 59.9M shipments in F4Q13 imply a ~100bps ship share gain and we view the company's reported $60 blended ASP ($/unit) as a positive, especially given the higher ship share contribution from 2.5” mobile drives in the quarter. Reported non-GAAP GM% at 29.1% was ahead of ~28.5% guide. We adjust our F2014 and F2015 estimates from $15.3B/$8.71 and $14.8B/$8.52 to $14.9/$8.40 and $14.4B/$8.50, respectively. We again highlight that our model retains a +14% opex-to-rev. contribution (vs. LT target at 10%-12) w/ a focus on post-MOFCOM leverage of up to +$100M/qtr. into mid/2HC2014 (i.e., +$1.50/sh.in annualized EPS not modeled).” Western Digital Corporation closed on Wednesday at $67.53.