Western Digital (NYSE:WDC) May Outperform Near Term on Inventory Restocking

Citing the probability the PC industry will restock inventory fairly soon Barclays (NYSE:BCS) sees a strong possibility Western Digital (NYSE:WDC) will exceed expectations in the short term.

They said, "Our checks continue to suggest that the HDD industry is starting to recover with TAM improving in C4Q10 with prices firming a bit. We continue to believe that WDC remains well positioned to benefit from a potential inventory restocking cycle in the PC industry starting next year...While not raising revenue estimates, our checks indicate that near-term forecasts may be conservative. For 2011, we now estimate non-GAAP EPS of $3.02 (was $2.86) based on a 4% y/y decline in revenue to $9.45 billion factoring in gross margins of 17.6% (was 17.2%)...For FY12, we now estimate non-GAAP EPS of $3.85 (was $3.65) based on 4% y/y growth to $9.83 billion with gross margins of 19.4%."

Barclays maintains an "Overweight" on Western Digital, which closed Tuesday at $33.50, falling $0.22, or 0.65 percent. They raised their price target on them from $39 to $41.