Seagate (STX) Buy Reiterated at Needham & Company as Xyratex Deal Completed

Needham & Company analyst Richard Kugele reiterated a Buy rating and $62 price target on Seagate Technology (NASDAQ: STX) after the company completed its previously announced acquisition of Xyratex Ltd.

Kugele said, "We believe that Seagate’s relatively inexpensive acquisition of Xyratex serves two key strategic functions: 1) protecting the critical testing equipment solution used almost exclusively within Seagate manufacturing; and 2) broadening Seagate’s product offerings upstream to include storage systems. When combined with other assets from STX (such as the cloud business, and the Kinetic platform) the company will immediately become one of the largest providers of storage in the world. Controlling the underlying HDD technology should also enable improved margins in the future for the division."

The firm raised estimates, accordingly. For F4Q, estimates become $3.59B and EPS of $0.99 vs. previous $3.46B and $1.30. For F15 estimates become $14.86B and $5.84 compared to last published $14.35B and $5.84.

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 $56.16 yesterday.

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