Mizuho lifts Seagate Technology price target to $130 from $110

Published 24/05/2025, 11:16
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On Friday, Mizuho (NYSE:MFG) Securities reiterated its positive stance on Seagate Technology (NASDAQ:STX) shares by raising the price target to $130 from the previous $110, while maintaining an Outperform rating. The adjustment followed Seagate’s recent Analyst Day event, which took place on May 22 in New York. The stock, currently trading near its 52-week high of $115.32, has demonstrated strong momentum with a 31.69% return year-to-date. According to InvestingPro data, analyst targets for the stock range from $68 to $140, reflecting diverse market opinions about this prominent player in the Technology Hardware sector.

The firm’s analyst highlighted several key takeaways from the event, noting advancements that could position Seagate ahead of its competitor, Western Digital Corp (NASDAQ:WDC). Among the significant developments, Seagate is expected to qualify its Mozaic 4+ Tbpsi disk in the September quarter of 2025, with volume production anticipated in the first half of 2026. This advancement could lead to the release of 40TB+ disks by Seagate ahead of Western Digital. With a market capitalization of $23.93 billion and a P/E ratio of 15.79, Seagate shows strong fundamentals to support these technological initiatives.

Furthermore, Seagate has reported that three out of eight cloud service providers have qualified or are ramping up on its Heat-Assisted Magnetic Recording (HAMR) technology. The company projects the qualification of 5TB/disk drives by 2028, with the path to 10TB/disk drives likely by 2032-2033 using HAMR technology.

The analyst also pointed to the expected growth in data center Exabytes (EBs), which are projected to grow at a mid-20% compound annual growth rate (CAGR). This growth is driven by the increasing demand for data storage fueled by artificial intelligence (AI).

Seagate’s updated financial model was also a topic of interest, targeting top-line growth at a low double-digit to mid-double-digit percentage CAGR. The model provides a line of sight to 40% gross margins, with the expectation that incremental HAMR revenues above a ~$2.6 billion quarterly run-rate will have a 50% margin drop-through. Operating expenses are expected to be maintained at 10% of revenues, and capital expenditures are projected to be between 4%-6% of revenue.

The positive outlook from Mizuho Securities reflects confidence in Seagate’s technological advancements and strategic positioning in the data storage market. InvestingPro analysis reveals several promising indicators, including an expected sales growth this year and 13 analysts revising their earnings upwards. For deeper insights into Seagate’s financial health and growth potential, including exclusive ProTips and comprehensive analysis, explore the detailed Pro Research Report available on InvestingPro, covering over 1,400 top US stocks.

In other recent news, Seagate Technology has announced a $5 billion stock repurchase program, highlighting its commitment to shareholder returns and confidence in its financial health. This buyback program, disclosed in an 8-K filing, allows for flexible share repurchases without a set expiration date. The company also held its 2025 Investor and Analyst Event, where it detailed ambitious financial goals driven by its Heat-Assisted Magnetic Recording (HAMR) technology. Seagate aims for a compound annual growth rate in the low-to-mid teens through fiscal year 2028, alongside a non-GAAP gross margin target of 40%.

Citi analysts have raised their price target for Seagate Technology to $140, maintaining a Buy rating, citing positive developments such as revenue growth and profitability targets. BNP Paribas (OTC:BNPQY) Exane analyst Karl Ackerman upgraded Seagate’s stock from Underperform to Neutral, increasing the price target to $100. Ackerman highlighted long-term volume commitments from hyperscalers as a stabilizing factor for the company. Additionally, Seagate’s management has presented a roadmap for HAMR technology through 2028, projecting structurally higher profitability.

These developments indicate a strong strategic direction for Seagate, supported by significant industry commitments and technological advancements. The company’s focus on leveraging its manufacturing and supply chain capabilities is expected to drive growth and profitability. Analysts from Citi and BNP Paribas Exane reflect confidence in Seagate’s future prospects, with revised price targets and ratings.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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