Seagate stock target raised to $110 at Cantor Fitzgerald

On Wednesday, Cantor Fitzgerald adjusted its outlook on Seagate Technology (NASDAQ:STX), increasing the price target to $110 from the previous $100 while maintaining a Neutral rating on the company’s shares. The revision follows Seagate’s recent financial performance, which surpassed expectations for the March quarter and provided an upbeat forecast for the June quarter, primarily driven by persistent demand from Cloud/hyperscale sectors. According to InvestingPro data, Seagate, currently trading at a P/E ratio of 15.7x with a market capitalization of $18.7 billion, appears undervalued based on its Fair Value analysis. The company has demonstrated strong financial health, earning a "GREAT" overall score from InvestingPro’s comprehensive evaluation system.

Seagate’s confidence in its calendar year 2025 (CY25) projections stands in contrast to other semiconductor companies, which have expressed concerns about the second half of 2025 due to tariff and macroeconomic challenges. This confidence appears well-founded, as InvestingPro data shows impressive revenue growth of 36.3% over the last twelve months, with analysts expecting continued sales growth this year. Seagate’s optimism is attributed to its build-to-order strategy, which offers strong visibility extending through CY25 and into the first half of CY26. The company also anticipates continued gross margin growth throughout the year, supported by increasing revenues (current gross margin stands at 34%), a favorable product mix with a shift to higher capacity drives, contributions from Heat-Assisted Magnetic Recording (HAMR) technology, and slightly higher like-for-like pricing.

The advancement of HAMR technology is progressing well, as evidenced by a second major Cloud Service Provider (CSP) nearing the end of product qualifications. This progress is expected to contribute significantly to revenues in the latter part of the year. Additionally, Exabyte (EB) growth is forecasted to be fueled by technological transitions, with the potential to exceed the previously stated 160EB target.

Cantor Fitzgerald’s report anticipates that Seagate’s strong performance will be echoed in Western Digital ’s (NASDAQ:WDC) earnings report, scheduled for release the following morning. Analysts at Cantor Fitzgerald have revised their earnings per share (EPS) estimates for Seagate for CY25 and CY26 to $8.95 and $10.60, respectively, up from the earlier projections of $8.10 and $9.50. The consensus estimates for the same periods stood at $8.30 and $9.92. The new price target of $110 is based on a 10x multiple applied to the firm’s increased CY26 EPS estimate, reaffirming the Neutral stance on Seagate shares.

In other recent news, Seagate Technology has been the focus of several analyst updates. Morgan Stanley (NYSE:MS) increased its price target for Seagate to $138, maintaining an Overweight rating, citing a sustainable hard disk drive cycle and stronger gross margins. The analysts at Morgan Stanley see potential for earnings per share revisions that could exceed market expectations, suggesting possible stock re-rating. Conversely, Citi adjusted its price target for Seagate to $115 from $125, while maintaining a Buy rating, reflecting the upcoming impact of the global minimum tax and slightly improved gross margin assumptions. Mizuho (NYSE:MFG) also revised its price target for Seagate, lowering it to $95 from $115, but kept an Outperform rating, acknowledging the company’s advancements in Heat-Assisted Magnetic Recording (HAMR) technology. Seagate’s rollout of HAMR-based products, including 36TB drives, is expected to support revenue and earnings growth. The company is poised to meet rising data storage demands, particularly from cloud service providers. These recent developments highlight the varied analyst perspectives on Seagate’s financial outlook and market position.

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