Evercore ISI initiated coverage on Seagate Technology Holdings (NASDAQ:STX), assigning it an Outperform rating and setting a price target of $110 on the stock. This target suggests a potential 25% increase from the current share price. Following this announcement, the company’s shares experienced a nearly 3% rise intra-day today.

The analysts expressed optimism for both Seagate and the larger hard disk drive (HDD) industry, citing several key factors expected to drive growth. These factors include a cyclical recovery among Hyperscalers and others, margin improvement as Heat Assisted Magnetic Recording (HAMR) technology advances, a more disciplined HDD market, and a shift in capital allocation favoring buybacks.

Evercore anticipates Seagate could achieve an earnings per share (EPS) range of $10-12 by fiscal year 2027, indicating significant potential for stock price appreciation from current levels.

For the fiscal year 2025, Evercore projects Seagate will surpass consensus estimates by posting an EPS of over $5.00, compared to the consensus forecast of $4.70. This expectation is rooted in a belief that the market has yet to fully appreciate Seagate's potential for future margin expansion.