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On Friday, BofA Securities analyst Mehdi Hosseini increased the price target for Seagate Technology (NASDAQ:STX) shares from $120.00 to $125.00, while reaffirming a Buy rating on the stock. The company’s stock, currently trading at $112.74, has shown strong momentum with a 31.7% gain year-to-date. According to InvestingPro data, Seagate maintains a "GOOD" overall financial health score, with 13 analysts recently revising their earnings estimates upward. The adjustment followed Seagate’s Analyst Day in New York City, where the company presented its mid-term financial targets, which include a low-to-mid teens revenue compound annual growth rate (CAGR) from fiscal year 2025 to fiscal year 2028.
Seagate Technology outlined several goals during the event. These targets comprise gross margins (GMs) of 40%, with potential for further expansion, operating expenses (Opex) around 10% of revenues, capital expenditures (Capex) between 4-6% of revenues, and a commitment to returning over 75% of free cash flow (FCF) to shareholders. The company currently maintains a gross profit margin of 33.8% and has demonstrated its commitment to shareholder returns with 15 consecutive years of dividend payments. For deeper insights into Seagate’s financial health and detailed metrics, check out the comprehensive Pro Research Report available on InvestingPro.
The company also announced the completion of three major cloud service provider qualifications and anticipates a fourth qualification within the next twelve months. In terms of product development, Seagate expects to begin the volume ramp of its 40TB hard disk drives in the first half of calendar year 2026, with Heat-Assisted Magnetic Recording (HAMR) technology anticipated to account for 50% of its product mix by the second half of 2026. As a prominent player in the Technology Hardware, Storage & Peripherals industry, Seagate has demonstrated strong revenue growth, with a 36.3% increase in the last twelve months.
Hosseini noted that while Seagate’s revenue CAGR forecast is somewhat aggressive, and full credit is not given to the company for both revenues and margins at present, the achievement of these targets could see earnings per share (EPS) approach or exceed $15 by fiscal year 2028.
The analyst’s positive stance on Seagate Technology is supported by the secular demand trends from the Cloud sector, potential revenue and margin recovery from current trough levels, and the pathway towards higher capacity HAMR hard disk drives.
In other recent news, Seagate Technology has shared several significant updates that have caught the attention of investors. The company has set ambitious financial targets through fiscal year 2028, aiming for a revenue compound annual growth rate (CAGR) in the low-to-mid teens. These projections were part of the discussions at Seagate’s recent Investor and Analyst Event, where the company also highlighted the adoption of its Heat-Assisted Magnetic Recording (HAMR) technology. In addition, Seagate announced a $5 billion stock buyback authorization, demonstrating its commitment to shareholder returns.
Analysts have responded to these developments with adjustments to their price targets for Seagate. Morgan Stanley (NYSE:MS) raised its price target to $140, citing Seagate’s technological leadership and potential benefits from data growth. Similarly, Citi increased its price target to $140, maintaining a Buy rating, and emphasized the company’s positive revenue growth and profitability targets. Mizuho (NYSE:MFG) Securities also lifted its price target to $130, highlighting Seagate’s advancements in HAMR technology and strategic positioning in the data storage market.
Cantor Fitzgerald maintained a Neutral rating with a $125 price target, noting Seagate’s revised earnings per share (EPS) target for fiscal year 2028. Seagate’s management has provided guidance for a low- to mid-teens percentage revenue growth CAGR for fiscal years 2024 to 2028, aligning investor expectations with the company’s strategic plans. These updates collectively underscore Seagate’s focus on growth and innovation in response to rising data storage demands.
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