Needham & Company Cuts Price Target on Seagate Technology (STX) Following Negative Preliminary 3Q Results
Needham & Company maintained a Buy rating on Seagate Technology (NASDAQ: STX), and cut the price target to $41.00 (from $47.00), following the company's preliminary 3Q results. STX negatively pre-announced results of ~$2.6B vs. $2.7B guidance (Street $2.7B) on ~39M units.
Analyst Richard Kugele commented, "Weak PCs and even softer mission-critical drives are not surprising to us. Our positive stance is based on: 1) maintained dividend (we continue to expect this, and it makes the >7% yield too good to ignore); and 2) manufacturing footprint consolidation of 20-30% of capacity and mix shift to a largely enterprise high-cap focus dramatically changes the business model. We see everything else in the interim as theater and would use any opportunities to build positions in the name. Maintain Buy, but our target goes to $41 from $47 based on 11x our lowered EPS FY17E EPS of $3.71."
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Shares of Seagate Technology closed at $33.93 yesterday.