Huan Qiu Wang·2026-02-19 01:46Group 1 - Western Digital plans to swap its SanDisk shares with debt held by Morgan Stanley and Bank of America affiliates, with approximately 5.8 million shares priced at $545 each, reflecting a 7.7% discount from SanDisk's closing price [1] - The transaction is expected to complete by February 19, and is part of Western Digital's strategy to de-leverage ahead of the one-year anniversary of its spin-off [1] - Analyst Amit Daryanani from Evercore ISI noted that this transaction could accelerate Western Digital's de-leveraging efforts and potentially lead to a net cash position, with an expected 4% to 6% increase in earnings per share in the short to medium term [1] Group 2 - Multiple institutions have given Western Digital a "buy" rating, with Bank of America raising its target price to $257 and Morgan Stanley to $306, indicating confidence in the company's capital allocation flexibility [4] - Proceeds from the sale are intended for further debt reduction, enhancing Western Digital's strategic focus on its HDD business [4] - Since the spin-off, SanDisk's stock has surged over 1500%, with a 148.8% increase in 2026 alone, while Western Digital's stock has risen 65%, ranking third in the S&P 500 [4]