Seagate Technology (STX): Upside Is Already In The Stock - Deutsche Bank
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Deutsche Bank analyst, Sherri Scribner, reiterated her Hold rating on shares of Seagate Technology (NASDAQ: STX) after the company provided preliminary F1Q-17 results that beat prior sales guidance by $100M and GM by 2ppts. The analyst believes that cost-cutting actions appear to be on track due to the better GMs and lower OpEx Y/Y.
Most of the upside appears to be the result of mix shift to high-capacity enterprise HDDs purchased by cloud providers. This helped drive 21% Y/Y growth in exabytes. The analyst stated "STX's shift to higher value segments of the market is paying off, in our view, and we continue to see these segments as the long-term growth driver for the HDD industry. With visibility improving in these segments, we expect continued positive EPS, but believe today's announced upside was already reflected in the stock".
No change to the price target of $35.
Shares of Seagate Technology closed at $35.10 yesterday.
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