On Wednesday, Rosenblatt Securities increased its price target on shares of Seagate Technology (NASDAQ:STX) shares to $150 from the previous target of $140, while reiterating a Buy rating on the stock. The firm's analyst highlighted Seagate's promising position, noting that the company is at the beginning of a robust product and demand cycle.
Analyst pointed out that Seagate's introduction of higher density hard disk drives (HDDs), such as the 24TB CMR and 28TB SMR, along with HAMR-based HDDs, has boosted the company's non-GAAP gross margins (GM) to the highest levels in a decade. Despite a supply chain hiccup that affected approximately $200 million in revenue for these high-capacity drives, the analyst expects margin expansion to continue in the March 2025 quarter.
The supply chain issue, which had a significant impact on Seagate's ability to meet demand for its 24TB and 28TB HDDs, has reportedly been resolved. With this obstacle out of the way, Cassidy foresees a continuation of build-to-order demand growth extending into the June quarter.
In light of these developments, Rosenblatt has revised its financial estimates for Seagate upward. The firm is increasing its non-GAAP gross margin forecasts, as well as its non-GAAP earnings per share (EPS) projections.
The positive adjustments are reflected in the newly raised 12-month price target of $150 for Seagate Technology stock. Cassidy's comments underscore a confidence in Seagate's market position and its ability to capitalize on current product and demand dynamics.
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