Seagate Technology (STX): Positive Preannouncement Possible - RBC

RBC Capital analyst, Amit Daryanani thinks Seagate Technology (NASDAQ: STX) could see modest upside to the HDD TAM expectations at ~95M units. The analyst sees upside bias to STX revenue and EPS going into earnings, after 3 negative pre-announcements over last 12-months. The analyst sees potential for upside vs. downside this time around. Checks suggest HDD TAM is tracking towards 97-98M units in June-qtr (down 3% q/q) vs. STX guide for sales down 11% q/q (~90M TAM).

Should TAM upside sustain, he sees $50-100M revenue upside and contingent on better execution, we see ~$0.05-0.10c EPS upside (Street at $2.34B/$0.13). He sees HDD upside stemming from better PC demand coupled with stability across hyperscale HDD, partially offset by softness in mission critical. Pricing has been more stable but we saw share shift occur (on the very low-end) in Toshiba’s favor.

No change to Sector Perform rating or price target of $24.

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 $22.53 yesterday.

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