Shares of Western Digital Corp. WDC, +1.97% are up 1.7% in premarket trading Monday after Longbow Research analyst Nikolay Todorov upgraded the stock to buy from neutral. “There is a line of sight to cyclical recovery” as NAND fundamentals are bottoming, Todorov said. He expects further rationalization of NAND capital expenditures and production within the industry amid pressure on profits. He also projects that Western Digital will see a recovery in both gross margins and hard-drive revenue during the second half of the year. Consensus figures don’t appropriately take this into account, according to Todorov. Western Digital shares have gained 38% over the past three months, as the S&P 500 SPX, +0.66% has risen 11%.
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