Seagate Technology (NASDAQ:STX) shares surged more than 10% on Thursday after the company reported Q2 results, with EPS of $0.16 coming in better than the Street estimate of $0.10. Revenue was $1.89 billion, beating the Street estimate of $1.83 billion.

The company is guiding its nearline exabyte shipment to improve sequentially in Q3 with demand continuing to improve throughout 2023, essentially suggesting that revenue has already troughed in the current cycle.

In addition, the company should see a nice recovery in gross margin in Q4 driven by the absence of underutilization charges and manufacturing inefficiencies.

Deutsche Bank analysts maintained their 2023/2024 EPS of $3.60/$6.00, but raised their price target from $55 to $60 on a slightly higher target multiple.