Brean Murray Carret Raises Price Target on Seagate Technology (STX), Recommends Over Western Digital (WDC)

Brean Murray Carret & Co. is reiterating its Buy rating on shares of Seagate Technology (NASDAQ: STX), while increasing its price target from $15 to $18.

The firm notes units will be weak during the third quarter, but forecasts a significant increase in earnings power over the March or June quarter. As a result, Brean Murray Carret raised its fiscal 2012 EPS estimate from $1.76 to $2.78.

Seagate Tech. stands to benefit more as a result of components coming back online than Western Digital (NYSE: WDC), and as a result they recommend buying shares of STX over WDC.

Due to the flooding in Thailand, many things such as demand, pricing, and costs are still questionable int he coming quarters. While not being complete sure, the firm is forecasting a possible peak in gross margins in the 2012 noting that at least 26 percent is achievable.

An analyst at Brean Murray Carret comments, "We model 5 million unit shipment improvement each quarter, We believe likely soft case would be flattish with our 45 million December quarter estimate, while a best case would be 60 million in March quarter/June quarter."

For the December quarter and fiscal 2012, Brean Murray Carret currently estimates EPS of $0.29 and $1.58.

For more ratings news on Seagate Technology click here and for the rating history of Seagate Technology click here.

Shares of Seagate Technology closed at $12.06 yesterday.

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