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Investing.com - Benchmark raised its price target on Seagate Technology (NASDAQ:STX) to $165 from $128 on Wednesday, while maintaining a Buy rating on the data storage company’s stock. The company, currently valued at $31.09 billion, has seen its shares surge 79.29% year-to-date, trading near its 52-week high.
The price target increase follows Seagate’s strong June quarter results, which exceeded expectations due to robust global cloud demand. The company reported record Nearline drive shipments and gross margins during the quarter, with revenue growth reaching 36.29%. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value model.
Benchmark noted that Seagate’s Nearline drives are fully booked through mid-2026, indicating sustained demand for the company’s high-capacity enterprise storage solutions.
Despite this positive outlook, Seagate guided for relatively flat performance in the September quarter. The company also faces a significant increase in its corporate tax rate to mid-teen percentages starting in fiscal year 2026 due to the implementation of the Pillar Two framework for global minimum tax.
For fiscal year 2026, Benchmark projects Seagate’s non-GAAP earnings will increase by 27.5% year-over-year to $10.33 per diluted share on sales of $10.7 billion, supporting the firm’s higher price target and continued Buy recommendation. This outlook aligns with InvestingPro’s analysis, which indicates strong financial health and positive growth momentum.
In other recent news, Seagate Technology reported its June quarter earnings, revealing revenue of $2.44 billion and earnings per share of $2.59, both exceeding consensus estimates of $2.42 billion and $2.45, respectively. Despite this, the company’s guidance for the upcoming quarter was slightly below analyst expectations, projecting revenue of $2.5 billion and earnings per share of $2.30. This development led to an 8% drop in Seagate’s share price. In response to these earnings, several analyst firms adjusted their price targets for Seagate. Rosenblatt increased its price target to $200 from $185, noting positive trends such as margin expansion and product mix improvements. TD Cowen also raised its price target to $175 from $135, citing HAMR momentum and improved cloud visibility. Mizuho (NYSE:MFG) adjusted its price target to $160 from $155, maintaining an Outperform rating due to increased cloud demand. These developments reflect a mixed outlook for Seagate, with positive earnings results tempered by cautious guidance.
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