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On Friday, Citi analyst Asiya Merchant updated the firm’s stance on Seagate Technology (NASDAQ:STX), increasing the price target to $140 from the previous $125 while reaffirming a Buy rating on the shares. The adjustment follows Seagate Technology’s first analyst day since 2021, during which management presented optimistic revenue growth and profitability targets. The company also announced a $5 billion stock buyback authorization expected to commence in the upcoming quarters. With a current market capitalization of $23.1 billion and a P/E ratio of 15.28x, InvestingPro data shows the stock trading near its 52-week high, supported by 14 analysts recently revising their earnings estimates upward.
Seagate Technology’s management highlighted several positive developments, including the successful HAMR (Heat-Assisted Magnetic Recording) technology qualification at three of the eight global hyperscalers. They also reiterated several tailwinds benefiting the company, such as a compound annual growth rate (CAGR) in the mid-20s percentage for market EB (exabyte) growth, driven by datacenter buildouts and AI-generated data. Additionally, management reported over 12 months of demand visibility, a balance between market supply and demand, and underserved demand, noting that Seagate Technology cannot fulfill significant order upsides. This strong market position is reflected in the company’s impressive 36.29% revenue growth over the last twelve months. InvestingPro analysis reveals 10+ additional insights about Seagate’s growth trajectory and market position.
The company has also been able to implement like-for-like price increases and maintains a roadmap for HAMR technology through 2028, with areal density viability extending through 2033. Seagate Technology continues to expect a sixfold cost advantage over SSDs (Solid State Drives). These factors contribute to an outlook of structurally higher profitability and returns for shareholders. The company maintains a steady 2.65% dividend yield and has consistently paid dividends for 15 consecutive years. For comprehensive analysis of Seagate’s financial health and future prospects, investors can access the detailed Pro Research Report available on InvestingPro.
In response to these updates, Citi has raised its estimates for Seagate Technology’s revenue and profitability. The new price target of $140 is based on an unchanged 12 times price-to-earnings (PE) ratio on the next 24 months’ estimated earnings per share (EPS). The next anticipated event for investors is Seagate Technology’s headquarters visit during Citi’s Silicon Valley Bus tour on June 2, 2025.
In other recent news, Seagate Technology has announced a $5 billion stock repurchase program, reflecting its commitment to returning value to shareholders. This program will be executed through various means and will not have a set expiration date, allowing flexibility in response to market conditions. During its recent Investor and Analyst Event, Seagate outlined ambitious financial targets through the fiscal year 2028, aiming for a revenue compound annual growth rate in the low-to-mid teens and a non-GAAP gross margin of 40%. Seagate’s strategic focus on Heat-Assisted Magnetic Recording (HAMR) technology is expected to support these goals, with the company planning to enhance its product lineup with innovations like the upcoming 40TB HAMR product.
Analysts from Citi have increased Seagate’s price target to $125, maintaining a Buy rating, citing the company’s strong demand and strategic outlook. BNP Paribas (OTC:BNPQY) Exane also upgraded Seagate’s stock rating from Underperform to Neutral, raising the price target to $100, driven by positive industry dynamics. Kerrisdale Capital has provided a bullish assessment, highlighting Seagate’s technological advancements and significant market share in the hard disk drive (HDD) sector. These developments underscore Seagate’s positioning in the data storage industry and its potential for future growth.
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