Bank of America Merrill Lynch Maintains Buy On Western Digital

Bank of America Merrill Lynch is out with a research report on Western Digital WDC after it reported earnings, and is Maintaining its Buy rating and $45 price target. In a note to clients, Bank of America Merrill Lynch writes, "F4Q11 EPS of $0.81 beat our/Street of $0.70/0.67 on higher gross margin (19.5% vs. our 18.6%) and revenue ($2.40bn vs. our/Street $2.36/2.28bn). WD expects Total Available Market (TAM) of 170-175mn (+2-5% Q/Q; normal +15%) versus our 173mn and Seagate's 165-170mn, should still be conservative. F1Q12 revenue and EPS guidance of $2.43-$2.53bn and $0.90-1.00 (roughly inline with our prior $2.55bn/$0.95) compares favorably to prior Street revenue/EPS of $2.45bn/$0.91. WD's solid results and gross margin/revenue/TAM guidance should ease concerns from Seagate's report on 7/20. Maintain Buy." Shares of WDC lost $2.95 yesterday to close at $35.13, a loss of 7.75%.