Goldman Sachs Reiterates Neutral Rating on Seagate Technology (STX)
Goldman Sachs analyst Toshiya Hari reiterated a Neutral rating and $112.00 price target on Seagate Technology (NASDAQ: STX).
The analyst comments "Supported by sustained strength in Nearline HDD, Seagate delivered FY1Q (Sept) results and FY2Q (Dec) guidance that modestly exceeded prior Street expectations, including FY1Q non-GAAP gross margin (excl. SBC) of 33.3% (i.e. highest in more than a decade). On the technology front, while the qualification of Seagate’s HAMR-based drives is taking longer than originally expected, we are encouraged by the company’s progress (note multiple Cloud and Enterprise customers are currently in the qualification process) and believe that industry-wide adoption of HAMR technology is a matter of when, not if. That said, we are reducing our CY2024-26 non-GAAP EPS (excl. SBC) forecasts, on average, by 10% to reflect March quarter seasonality and a potential moderation in the rate of Nearline HDD price increases. We maintain our Neutral rating on STX with our updated 12-month price target of $112, representing 5% potential upside from the AH price of $107. See our full note for a summary of the key takeaways from the print/call, implications for WDC (Neutral) and an updated bull/bear framework."
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Shares of Seagate Technology closed at $112.64 yesterday.