Seagate Technology price target raised to $155 from $130 at Mizuho

Investing.com - Mizuho (NYSE:MFG) raised its price target on Seagate Technology (NASDAQ:STX) to $155 from $130 on Thursday, while maintaining an Outperform rating on the data storage company’s stock. The stock, currently trading at $142.01, has shown remarkable strength with a 62% surge over the past six months. According to InvestingPro analysis, Seagate appears undervalued based on its proprietary Fair Value model.

The firm kept its June quarter revenue and earnings per share estimates unchanged at $2.40 billion and $2.40, respectively, which align with consensus estimates of $2.40 billion in revenue and $2.43 in EPS. This follows Seagate’s strong performance, with trailing twelve-month revenue of $8.54 billion and impressive revenue growth of 36.29%. InvestingPro data reveals 8 additional key insights about Seagate’s growth prospects and market position.

Mizuho adjusted its fiscal 2026 estimates from $10.2 billion in revenue and $9.64 EPS to $10.5 billion and $9.92, compared to consensus projections of $10.2 billion and $9.80. For fiscal 2027, the firm raised estimates from $10.8 billion in revenue and $10.82 EPS to $11.3 billion and $11.37, versus consensus of $10.8 billion and $11.25.

The new price target represents a 15.6x multiple on Mizuho’s fiscal 2026 earnings estimate, up from the previous 13.5x multiple, and compares to Seagate’s five-year P/E range of 5.6x to 15.5x.

Mizuho cited Seagate’s HAMR (Heat-Assisted Magnetic Recording) technology as driving increasing gross margins through improved areal densities, noting strong hard disk drive demand expected into 2026 as the technology is currently in volume production at three cloud service provider customers and expected to ramp at all eight providers within the next 12 months. As a prominent player in the Technology Hardware, Storage & Peripherals industry, Seagate maintains a healthy gross profit margin of 33.79%. Get comprehensive analysis of Seagate’s competitive position and growth potential in the exclusive Pro Research Report, available on InvestingPro.

In other recent news, Seagate Technology has captured the attention of several investment firms with updates on its financial targets and technological advancements. Goldman Sachs initiated coverage on Seagate with a Buy rating, citing the company’s leadership in Heat-Assisted Magnetic Recording (HAMR) technology and projecting operating margins to exceed 30% over the medium term. BofA Securities also showed confidence in Seagate by raising its price target to $135, emphasizing the company’s capabilities in managing supply and demand cycles and the potential for revenue and margin recovery. Furthermore, Morgan Stanley (NYSE:MS) increased its price target to $140, highlighting Seagate’s strong position in the market and expecting significant growth in storage demand driven by computing advancements.

Cantor Fitzgerald maintained a Neutral rating with a $125 price target, acknowledging Seagate’s revenue growth targets but noting investor confusion over the company’s projected growth rates. The firm pointed out Seagate’s revised earnings per share (EPS) target for fiscal year 2028, which is now estimated closer to $16.50. Analysts from these firms generally agree on Seagate’s potential to benefit from the growth in cloud computing and data center expansion.

Seagate’s management has also outlined ambitious mid-term financial goals, including a low-to-mid teens revenue compound annual growth rate (CAGR) and a significant share buyback plan. The company plans to ramp up its 40TB hard disk drives, with HAMR technology expected to account for half of its product mix by the second half of 2026. Investors will likely keep a close watch on Seagate’s ability to meet these targets and maintain its competitive edge in the evolving data storage landscape.

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