WDC
Western Digital Corporation
$665.26
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 189.1% above fair value
You pay
$665.26
Bear
$184.08
Fair
$230.08
Bull
$276.10
Bear
$184.08
-72.3%
$5.15 × 15x P/E
Fair
$230.08
-65.4%
$5.15 × 19x P/E
Bull
$276.10
-58.5%
$5.15 × 22x P/E
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
129.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $479.29 from 61 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $230.08 per share.
Warnings
Wall Street's average price target is $479.29 (from 61 analysts). Our estimate is 80% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples