How are energy investors positioned?
Investing.com - TD Cowen raised its price target on Seagate Technology (NASDAQ:STX) to $175.00 from $135.00 on Wednesday, while maintaining a Buy rating on the data storage company. The stock has shown remarkable momentum, delivering a 57.46% return over the past six months. According to InvestingPro analysis, Seagate’s current market position appears fairly valued based on its proprietary Fair Value model.
The firm cited HAMR (Heat-Assisted Magnetic Recording) momentum and improved cloud visibility as key factors supporting the potential upside for Seagate shares, despite revenue guidance that came in slightly below market expectations.
Seagate’s revenue guidance of $2.5 billion and EPS of $2.30 fell short of consensus estimates of $2.53 billion and $2.36, respectively. TD Cowen noted that the EPS miss was primarily due to a higher-than-expected share count resulting from the exercise of 2028 convertible notes.
The analyst firm explained that after adjusting for the share count impact, Seagate would have guided for nearly $2.36 in EPS on $2.5 billion in revenue, which would have been in line with Street expectations.
TD Cowen maintained its bullish outlook on Seagate, noting that the HAMR technology ramp remains in its early stages while cloud demand is midcycle, factors that should drive PE expansion as cloud mix increases and share repurchases resume after a three-year pause.
In other recent news, Seagate Technology reported better-than-expected earnings for the fourth quarter, with adjusted earnings per share of $2.59, surpassing the analyst estimate of $2.44. The company also posted revenue of $2.44 billion, slightly above the consensus estimate of $2.42 billion and a notable increase from $1.89 billion in the same quarter last year. Despite the positive earnings, Seagate’s guidance for the upcoming quarter did not meet analyst expectations, which led to a decline in the company’s stock. In response to Seagate’s earnings performance, Rosenblatt raised its price target for the company to $200, maintaining a Buy rating, while noting positive trends such as margin expansion. Similarly, Mizuho (NYSE:MFG) increased its price target to $160, citing strong cloud demand and maintaining an Outperform rating. Seagate projected revenue of $2.5 billion and earnings per share of $2.30 for the September quarter, aligning with market expectations. These developments highlight the company’s recent financial performance and the mixed reactions from analysts regarding its future outlook.
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