Auriga Reiterates a 'Buy' on Seagate Technology (STX); Beats Twice Raised Estimates; Massively Guides Up

Auriga reiterates a 'Buy' on Seagate Technology (NASDAQ: STX) price target raised from $32 to $38.

Auriga analyst says, "Seagate beat December estimates and massively increased forward guidance. With strong pricing likely to persist for at least a year and longer term supply agreements providing stable unit outlook beyond that, Seagate is finally proving to skeptical investors just how much they are benefiting from the Thai floods. With over $11 in F13 EPS and over $4.5Bn in F13 free cash flow now expected, Seagate shares continue to look substantially undervalued; thus we reiterate a Buy rating . Seagate beats twice-increased guidance. Seagate reported revenue and pro-forma EPS of $3.2Bn/$1.36 vs. our most recent estimate of $3.1bn/$1.10 (Street at $3.1Bn/$1.07 on apples/apples basis). As we had suspected, both pricing and gross margin came in even better than we forecasted, and SG&A expense was also lower than we had assumed, resulting in a record operating margin of 20.3% (versus our estimate of 17.9%). Units of 47Mn were as expected."

For an analyst ratings summary and ratings history on Seagate Technology click here. For more ratings news on Seagate Technology click here.

Shares of Seagate Technology closed at $21.14 yesterday.

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