WDC
Western Digital Corporation
$450.75
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 17.5% below fair value
You pay
$450.75
Bear
$437.04
Fair
$546.30
Bull
$655.56
Bear
$437.04
-3.0%
$24.28 × 18x P/E
Fair
$546.30
+21.2%
$24.28 × 22x P/E
Bull
$655.56
+45.4%
$24.28 × 27x P/E
Adjust Assumptions
22.5x
24.28$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
18.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (61 analysts)
$647.58
Divergence from AlphaVal
16%
Summary
Applying a 22x P/E to adjusted EPS of $24.28, the base-case value is $546.30 per share.
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