According to Deutsche Bank, it is time to go over the edge at Western Digital. Analyst Sydney Ho further downgraded the shares to prevent buying, citing weak demand. The analyst lowered his price target on the stock from $56 to $40. The new target is up about 9% from Monday’s close. “We believe WDC’s F1Q (September) revenue and EPS are tracking below the low end of guidance, and the F2Q (December) outlook is also likely to be meaningfully below current Street estimates,” Ho said on Monday. written in the note. “Demand declined in the current quarter with MU and STX already revising their outlook, but our recent industry investigations suggest that inventory adjustments and Flash ASP erosion will continue for at least the next two quarters. and we note that demand is seasonally weak in 1H. CY23,” Ho added. Western Digital is down about 44% this year, and is down about 47% from its 52-week high, as the data storage maker resisted softening demand and supply chain issues. The analyst expects these concerns to continue into the holiday season, citing checks with the supply chain, pointing to a further upside. Ho recommends investors hold onto the stock until the supply-demand balance returns. “Of particular concern to us is that WDC now expects its free cash to be negative in fiscal 2013 (ending June 2023),” Ho wrote. “While we don’t see a significant drop in the current share price as the stock is trading at ~1.0x EV/sell, we also struggle to see any meaningful bounce in the next 6-9 months as the flash The memory market remains over-supplied and macro concerns intensify.” The stock dropped 1.7% in Tuesday’s premarket trading. —CNBC’s Michael Bloom contributed to this report.