Seagate stock price target cut to $95 at Mizuho

Thursday, Mizuho (NYSE:MFG) analysts adjusted their outlook on Seagate Technology (NASDAQ:STX), reducing the price target to $95 from the previous $115, while retaining an Outperform rating on the company's shares. The revision reflects a valuation at 10.3 times the firm's projected fiscal year 2026 earnings per share (EPS). Currently trading at a P/E ratio of 13.1x and showing a "GREAT" financial health score according to InvestingPro metrics, the stock appears undervalued based on Fair Value calculations.

The analysts expressed confidence in Seagate's market position, citing the introduction of Heat-Assisted Magnetic Recording (HAMR) technology as a potential catalyst for market share gains in the estimated year of 2025. Seagate has commenced the rollout of its first HAMR-based products, with 36TB drives now being introduced to initial cloud service provider (CSP) customers and samples being distributed in anticipation of a broader product ramp in the second half of 2025. This strategic move comes as the company demonstrates strong revenue growth of 24.2% over the last twelve months, with analysts forecasting continued sales growth this year.

The firm's analysts believe that Seagate is on a path to strengthen its revenue and EPS growth, driven by the HAMR technology. The higher average selling prices (ASPs) and improved margins associated with the higher-density drives are expected to be accretive to Seagate's financial performance.

Seagate's strategic advancements with HAMR technology are aimed at meeting the growing data storage demands by significantly increasing storage capacity. The technology is a key innovation for the company, positioning it to benefit from the expanding needs of CSPs for enhanced storage solutions.

The price target adjustment by Mizuho reflects a balance of optimism for Seagate's technological advancements and a recalibration of future financial expectations. The Outperform rating suggests that, despite the reduced price target, Mizuho's analysts anticipate Seagate's stock to perform better than the overall market.

In other recent news, Seagate Technology has been the subject of several analyst updates and target price revisions. Morgan Stanley (NYSE:MS) raised its price target for Seagate to $138, maintaining an Overweight rating, citing a sustainable hard disk drive cycle and stronger gross margins. Meanwhile, Rosenblatt Securities increased its price target to $150, highlighting Seagate's promising position in a robust product and demand cycle, despite a previous supply chain hiccup. Northland also raised its target to $160 following Seagate's higher-than-expected earnings, driven by increased gross margins and robust demand for its products.

Citi, however, adjusted its price target down to $115 from $125, while still maintaining a Buy rating. This revision reflects the anticipated impact of the global minimum tax and slightly higher gross margin assumptions due to industry dynamics and advancements in Heat-Assisted Magnetic Recording technology. Despite the downgrade, Citi remains optimistic about the Hard Disk Drive market, noting stable production plans and strong demand through 2025. Analysts from these firms generally express confidence in Seagate's ability to capitalize on current market conditions and product innovations.

These recent developments have highlighted Seagate Technology's position within the IT hardware sector, with varying analyst opinions on its future stock performance. The company's focus on high-capacity drives and its ability to manage supply chain challenges are key factors in these assessments. As the market digests these updates, investor attention will likely remain on Seagate's financial performance and strategic initiatives.

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