Western Digital (WDC) Has Proven M&A Track Record; Baird Maintains at 'Outperform' Amid SanDisk Deal

Baird reaffirmed its Outperform rating and $105 price target on Western Digital (Nasdaq: WDC) following news that the company would acquire SanDisk (Nasdaq: SNDK), which was announced earlier Wednesday.

Analyst Jayson Noland noted the following points:

• WD management has been busy. The Unis investment, the MOFCOM announcement, and the acquisition of SanDisk all within the last few weeks. Execution matters a lot. That said, WD has a proven M&A track record and this combination creates an industry leading portfolio of storage technologies benefiting from trends in the consumer market AND trends in cloud computing.
• Our price target of $105 is based on 10x our C17 EPS estimate of $11.50 per share discounted by 10%. Please see our preliminary merger model on page 2 of this note. We view the Samsung licensing agreement and supply/demand dynamics in the NAND market as areas of considerable modeling uncertainty.

For an analyst ratings summary and ratings history on Western Digital Corp. click here. For more ratings news on Western Digital Corp. click here.

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