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On Friday, Cantor Fitzgerald maintained a Neutral rating on Seagate Technology shares with a price target of $125.00, as the stock trades near its 52-week high of $115.32. The firm’s analyst noted that Seagate Technology’s management had provided guidance for a low- to mid-teens percentage revenue growth compound annual growth rate (CAGR) for fiscal years 2024 to 2028 earlier in the day. However, the implied growth rate compared to fiscal year 2025 was only a 6-7% CAGR, which caused confusion among investors. According to InvestingPro, 13 analysts have recently revised their earnings estimates upward, with price targets ranging from $68 to $140.
Seagate Technology issued a press release clarifying its financial targets, reinforcing the low- to mid-teens percentage growth CAGR against fiscal year 2025 projections. Based on this new information, the analyst believes that the earnings per share (EPS) target for fiscal year 2028 is now estimated to be closer to $16.50, in contrast to the previous $12.50 estimate and the analyst’s earlier projection of $15 by calendar year 2029. The company’s current diluted EPS stands at $6.85, with analysts forecasting $7.96 for fiscal year 2025.
The update from Seagate Technology’s management appears to have provided further justification for Cantor Fitzgerald’s $125 price target, which the analyst now suggests might be conservative in light of the recent developments. The company’s revised target model has been shared with the market in the hope of clarifying its future financial goals and growth trajectory. With a market capitalization of $23.93 billion and a P/E ratio of 15.79, InvestingPro data shows the stock has delivered an impressive 31.69% return year-to-date, suggesting strong market confidence in the company’s growth strategy.
The press release from Seagate Technology aims to align investor expectations with the company’s strategic plans for the coming years. With the updated target model EPS for fiscal year 2028, the company is signaling confidence in its ability to grow and generate increased profitability over the long term.
Investors will be watching Seagate Technology’s performance closely to see if the company can achieve the growth rates it has forecasted. The company’s stock price will likely continue to be influenced by its ability to meet or exceed these financial targets in the forthcoming fiscal years.
In other recent news, Seagate Technology has announced a $5 billion stock repurchase program, underscoring its commitment to shareholder returns and confidence in its financial health. This move comes as the company sets ambitious financial targets through 2028, aiming for a revenue compound annual growth rate in the low-to-mid teens and a gross margin of 40%. Additionally, Seagate is advancing its Heat-Assisted Magnetic Recording (HAMR) technology, with plans to qualify its Mozaic 4+ Tbpsi disk by 2025 and achieve volume production by 2026. Analysts from Morgan Stanley (NYSE:MS) and Citi have responded positively to these developments, each raising their price targets for Seagate to $140, while Mizuho (NYSE:MFG) Securities increased its target to $130. Morgan Stanley emphasized Seagate’s technological leadership and potential for significant EPS growth, while Citi noted the company’s structurally higher profitability outlook. Mizuho highlighted Seagate’s advancements in the data storage market, particularly its edge over competitor Western Digital (NASDAQ:WDC). These updates reflect a promising outlook for Seagate as it navigates the increasing demand for data storage driven by AI and data center expansion.
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