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Investing.com - Bernstein SocGen Group initiated coverage on Seagate Technology (NASDAQ:STX) with an Outperform rating and a price target of $250.00 on Tuesday. The stock, which has surged nearly 148% year-to-date and is trading near its 52-week high of $214.20, currently shows an overall "GREAT" financial health score according to InvestingPro data.
The research firm cited both cyclical and structural tailwinds aligning for the data storage company, including cyclical strength in hard disk drives (HDDs) and Seagate’s technology leadership in Heat-Assisted Magnetic Recording (HAMR) technology.
Bernstein SocGen believes Seagate stock has more room to run despite recent price appreciation, noting that the current valuation remains "un-demanding" given the company’s projected earnings per share (EPS) compound annual growth rate of over 20%.
The $250 price target represents a multiple of 18.5 times Bernstein SocGen’s fiscal year 2027 EPS estimate of $13.27, which the firm describes as "roughly its 5 year average" and "conservative considering its improving technology advantage and strong EPS and FCF growth."
This valuation implies an enterprise value of 22.8 times the firm’s estimate of $2.5 billion in fiscal year 2027 free cash flow, with Bernstein SocGen stating it had "sense-checked" this valuation against discounted cash flow analysis.
In other recent news, Seagate Technology reported strong June quarter results, surpassing expectations due to high global cloud demand. The company achieved record shipments of Nearline drives and impressive gross margins during this period. Benchmark responded by raising its price target for Seagate from $128 to $165, maintaining a Buy rating on the stock. Additionally, Cantor Fitzgerald reiterated its Overweight rating on Seagate, setting a price target of $175, highlighting Seagate’s standout performance in the market.
Seagate also announced a significant £100 million investment in Northern Ireland to advance nanophotonic innovations for future hard drives, supported by an additional £15 million from Invest NI. This five-year project aims to bolster the regional economy and enhance Seagate’s Mozaic 6+ technology to meet increasing global storage demands. In leadership developments, Seagate appointed AutoNation CFO Tom Szlosek to its Board of Directors, effective August 2025. Meanwhile, Western Digital was named the top pick in the storage sector by Morgan Stanley, with a new price target of $99, replacing Seagate in this position.
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