FBN Lifts TP on Seagate (STX) to $38 Amid Strong Prelim. Q1 Numbers
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FBN lifts its price target on Sector Perform-rated Seagate (Nasdaq: STX) from $33 to $38 following positive preliminary Q1 results released earlier Tuesday.
The firm commented today:
This morning, STX preannounced FQ1/Sept. quarter results above expectations. Revenue is now expected to be ~$2.8B, above the prior $2.7B estimate, and NG GM% is expected to be ~29%, much better than prior guidance of 27% and above the 25.8% level in FQ4. The GM strength was driven primarily by better than expected demand for high-capacity enterprise drives. Recall that last quarter STX noted strength from cloud service providers (CSPs) for the first time in some time. We believe that CSP strength continues, with positive implications for STX’s enterprise and GM outlook as well. We are raising our go-forward GM% estimates from around 27% to over 28%. STX noted strong growth in cloud-based storage Exabyte capacity as its new high-capacity HDD products are gaining traction in the marketplace.
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