Bank of America resets WDC stock price target before earnings | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Western Digital Corporation shares traded higher intraday on Tuesday, Jan. 20, as Bank of America reset its price target for the data storage solutions provider. The price change comes ahead of WDC‘s second-quarter 2026 earnings report, due after the market close on Thursday, January 29.

One of the strongest-performing stocks in the storage and hardware segment, WDC saw a 359% stock price gain over the last 12 months and more than 85% just this last quarter. The stock, up around 2.5% intraday, extended its weekly gain to 4%, highlighting investor interest in hard disk drive (HDD) exposure due to AI-driven data growth.

In a preview note shared ahead of its earnings, Bank of America analysts updated their targets, reflecting increased confidence in HDD, tightening supply conditions, and resilient pricing.

Bank of America reiterated its buy rating but raised its price target from $197 to $257. The firm now also forecasts C27 (Calendar year 2027) Earnings Per Share (EPS) of $10.60, reflecting increased confidence in sustained revenue growth and margin expansion for WDC.

BofA expects the company to deliver the results at the top end of management’s guidance, projecting Q2 revenue and EPS of $2.8bn and $2.85, above the Wall Street consensus of $2.7bn and $2.81, respectively. Analysts expect WDC to guide its Q3 revenue to $3.0bn, plus or minus $100 million, and EPS to $2.0, plus or minus $0.15.

Additionally, Bank of America expects the company’s gross margin to be 45% to 46% in the next quarter, signaling continued demand and margin expansion. Also noting stable pricing as “demand continues to outpace supply,” BofA believes WDC could ship 200+ exabytes per quarter in CY26.

For the full year 2026, BofA raised its estimates for WDC to $11.9 billion in revenue and $7.87 in EPS, up from previous estimates of $11.7 billion and $7.59, respectively, citing improved visibility and demand, as well as sustained margin upside.

In the long term, BofA sees secular growth in nearline HDD demand driven by hyperscalers and AI workloads that favor cost-efficient, high-capacity storage solutions like WDC’s.

Moreover, it looks forward to WDC’s Innovation Day, to be held Feb. 3, 2026, where it will provide an update on its product and technology roadmap.

Seagate’s stock is up 18% year to date.

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BofA also resets STX price target ahead of Q2

Western Digital’s earnings report will arrive just two days after its closest peer, Seagate Technology (STX), reports its second-quarter results on January 27, 2026. Through this, investors and analysts are looking forward to gauging a broader trend in the hard disk drive market.

Ahead of the Q2 reports, Bank of America reiterated its buy rating on the data storage infrastructure solution provider and raised its price target from $320 to $400, valuing the shares at 23x calendar 2027 EPS of $17.39.

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The market reacted optimistically, trading up earlier in the day to a fresh 52-week high at $336.17, but it was slightly lower near the bell.

Analysts at BofA cite continued strength in data center revenues and a seasonal improvement in revenues from Video and Image applications (VIA) as the basis for its price upgrade.

BofA expects Seagate to report revenue and EPS of $2.78bn/$2.85, above the Wall Street expectation of $2.74bn/$2.81 and in the upper half of guidance.

Gross margin is projected at 41%, in line with expectations, citing secular demand from “cloud, revenue and margin improvement leading to positive estimate revisions in the long-term,” paving the way for higher-capacity HAMR (Heat Assisted Magnetic Recording) HDDs.

Unlike Western Digital, Seagate is already shipping HAMR-based drives at scale, and BofA estimates the company to have shipped around 40 exabytes of HAMR capacity, or 1.3 million HAMR units in the quarter, gaining modest unit share quarter over quarter.

For the March quarter, BofA forecasts some seasonal changes in VIA and legacy end markets, buoyed by strong data center demands. This leads to an increase in prior estimates of revenue at $2.84 billion (+/- $100 million) and EPS of $2.90 (+/- 20 cents) for Q3 guidance, with the gross margin slightly expanding to 41.5%.

Rosenblatt, UBS, and Citi change STX and WDC price targets

Other banks seconded BofA’s forecasts and a generally soaring demand for HDDs from hyperscalers.

UBS raised its price target of STX to $335 from $230, maintaining a neutral rating, citing strong near-term demand, even though revenue upside is constrained by limited capacity.

For WDC, analysts at UBS raised their price target to $230 from $145, noting that Western Digital is likely to report fully booked capacity through 2027, but expecting a down cycle starting early 2028, as noted by TheFly.

Rosenblatt keeps a buy rating on Seagate, with analyst Kevin Cassidy raising the price target to $370 from $270, citing demand for HDDs across all end markets and its HAMR technology that “accelerates HDD densities and lowers cost per bit.” This allows it to offer customers lower prices per bit while increasing hard disk drive selling prices, as reported by TheFly.

For Western Digital, Rosenblatt’s Kevin Cassidy raised the price target to $270 from $165, maintaining a buy rating. Noting similar reasons to STX, it sees increasing hard disk prices and demands a reason for good visibility, highlighting WDC’s strategic, limited inventory build.

Citi analyst Asiya Merchant also raised STX’s price target to $385 from $320, maintaining a buy rating, noting “robust” hyperscale spending driving demand for power, storage, connectors, and fiber. Asiya also raised Western Digital’s price target to $280 from $200, maintaining a buy rating, as part of its adjusted targets for the technology hardware group in its 2026 outlook, according to TheFly.