Seagate Technology Holdings plc (NASDAQ:STX) shares were trading more than 9% lower Friday afternoon following the company’s reported Q4 results, with EPS coming in at $1.59, missing the Street estimate of $1.90. Revenue came in at $2.63 billion, worse than the Street estimate of $2.8 billion.

For Q1/23, the company expects EPS in the range of $1.20-$1.60, compared to the Street estimate of $2.27, and revenue in the range of $2.35-2.65 billion, compared to the Street estimate of $3.03 billion.

According to the analysts at Deutsche Bank, the earnings miss was not all that surprising given weak industry HDD shipment data, but the magnitude of the Q1 revenue cut is larger than expected driven by inventory adjustments across most segments.

While the company appears confident that inventory adjustments should be completed by the end of Q1 and is expecting 2023 revenue to be flat or up year-over-year, the analysts are more skeptical about the macro environment that could impact cloud and enterprise spending in H1/23.

The analysts lowered their price target on the company’s shares to $75 from $82, while maintaining their hold rating.