RBC Capital Cuts Price Target on Seagate Technology (STX) Following Quarterly Pre-Announcement
RBC Capital reiterated an Outperform rating on Seagate Technology (NASDAQ: STX), and cut the price target to $47.00 (from $53.00), following september quarter's pre-announcement. While unit shipments were in-line, the gross margin expectation is well below prior expectations of 27%. STX anticipates revenue of $2.9B, gross margins of 24% on 47M units and 40% market share (prior guide of $2.9b-3.1B/27% gross margins).
Analyst Amit Daryanani commented, "STX negatively pre-announced Sept-qtr to $2.9B/24% gross margins and 47M total units. Net Net: this represents a material miss on the gross margin line (Enterprise) and suggests share loss at the high end to Western Digital. We adjust our price target to $47 (down from $53)."
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Shares of Seagate Technology closed at $47.80 yesterday.