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Investing.com - TD Cowen has raised its price target on Seagate Technology (NASDAQ:STX) to $340.00 from $270.00 while maintaining a Buy rating on the stock.
The firm’s decision follows meetings with Seagate’s management team, including the company’s CFO and investor relations representatives, which took place last week. TD Cowen noted that both fundamentals and sentiment for the data storage company remain bullish.
The research firm highlighted Seagate’s rational approach to capacity additions, which involves 25% exabyte growth without unit growth. TD Cowen believes this strategy should positively impact long-term pricing and demand for the company’s products.
According to TD Cowen, Seagate’s financial model now depends more on pricing than on exabyte growth upside. The firm outlined a scenario where Seagate could generate approximately $20 in earnings per share by calendar year 2027, assuming 50% gross margins on $14 billion of revenues.
The new price target of $340 represents 20 times calendar year 2026 estimated earnings per share of $13.50. TD Cowen identified a potential slowdown in hyperscale data center buildouts as a risk factor for Seagate.
In other recent news, Seagate Technology reported fiscal first-quarter 2026 earnings that surpassed analyst expectations, with guidance for the second quarter also exceeding consensus forecasts. This strong performance was attributed to robust demand from Cloud customers and AI inference applications. In a strategic move, Seagate announced an agreement to exchange $500 million of its 3.50% Exchangeable Senior Notes due 2028 for cash and shares, further solidifying its financial position.
Analysts have responded positively to these developments. Cantor Fitzgerald raised its price target for Seagate to $400 from $280, maintaining an Overweight rating, citing ongoing HDD demand exceeding supply through 2026. Benchmark also increased its price target to $255, maintaining a Buy rating due to strong data center sales. Meanwhile, TD Cowen raised its price target to $270 from $175, reflecting a more optimistic view on Seagate’s growth potential. These recent developments indicate a positive outlook from analysts regarding Seagate’s business trajectory.
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