Seagate Technology (STX) PT Lowered to $55 at FBN Securities

FBN Securities analyst Shelby Seyrafi lowered the price target on Seagate Technology (NASDAQ: STX) to $55.00 (from $60.00) while maintaining an Outperform rating.

The analyst commented, "We retain our Outperform rating on STX and lower our PT from $60 to $55 following its FQ4 report in which the company beat consensus on revenue and EPS but below consensus for FQ1. The company is pivoting towards growing markets such as enterprise nearline drives, surveillance, NAS, and cloud, and in F2019 these markets contributed about half of its $10.4B revenue (while contributing an even higher percentage of gross profits). Although nearline EBs declined by 22% Y/Y in FQ4 (and by ~4% in F2019), the company expects nearline EB growth to outpace the estimated LT CAGR of 35-40% in F2020. The company began shipping its 16TB drives in late March, and the company expects volume shipments of these drives in C2019. By the end of C2020, STX expects to introduce 20TB HDDs, and with the company’s introduction of dual-actuator technology, the company continues to press the envelope on both performance and capacity for nearline drives. We are encouraged that STX expects demand from global cloud and hyperscale customers to continue to improve."

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