Analyst lowers Western Digital, Seagate targets

Robert W. Baird analyst Jayson Noland kept a "Neutral" rating on Western Digital, but lowered his target price to $24 from $35. The difficult industry conditions, he wrote in a note to investors, "will only be exacerbated by recent financial market stress."

He kept a "Neutral" rating on Seagate as well, but lowered his target price to $13 from $18.

As of Tuesday's close, shares of Lake Forest, Calif.-based Western Digital are down 29 percent in the year to date, while Seagate, which is based in the Cayman Islands and operates out of Scotts Valley, Calif., has seen its stock lose slightly over half its value.

"We believe Seagate and Western Digital stocks likely already reflect the weakness we are describing unless conditions deteriorate significantly," Noland wrote.

The hard drive industry's difficulties include pricing pressures and softening demand. Data storage company Xyratex Ltd. fell to a new multiyear low Wednesday posting fiscal third-quarter results and fourth-quarter guidance below expectations. Seagate and Western Digital are among Xyratex's customers.

Western Digital's shares fell 55 cents, or 2.6 percent, to $20.77 in afternoon trading, after earlier hitting as low as $20.11.

Seagate's shares fell 53 cents, or 4.4 percent, to $11.59. The stock has traded in the 52-week range of $10.79 and $28.91. Both stocks have recovered from their intraday lows.