Deutsche Bank Downgrades Seagate (STX) to Sell; Waiting For Better Entry Point
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Deutsche Bank downgrades Seagate (NYSE: STX) from Hold to Sell. Price target increased from $4 to $4.50.
Deutsche analyst says, "We remain cautious on Seagate, as we believe the shares have now priced in an improvement in demand, the successful renegotiation of debt covenants, and restructuring actions to reduce capacity and bring OpEx costs below $300M. With none of these items yet announced or resolved, we believe the shares are at risk for a correction. Our $4.50 price target implies STX trades at 4x our FY10E EV/EBITDA, which is at the midpoint of historical ranges...While our checks suggest that dynamics are more positive on the margin, we believe it is too early to buy the group. We believe there will be better entry points for the shares as we enter the seasonally weak June quarter."
To see more analyst ratings on STX Click Here.
Seagate Technology is engaged in the design, manufacture and marketing of hard disc drives.
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