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Seagate Technology's Price Target Raised by Rosenblatt Analysts Amid Strong Earnings
Jul 24, 2024 2:15 PM - Davit Kirakosyan
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Rosenblatt analysts increased their price target for Seagate Technology (NASDAQ:STX) to $125, up from $115, while maintaining a Buy rating, following the company’s reported Q4 earnings, which resulted in a stock price gain of nearly 5% pre-market today.
The analysts attributed the price target hike to higher-than-expected demand driven by cloud service providers and video & imaging applications. This surge in demand, coupled with a build-to-order strategy, has resulted in improved manufacturing utilization and increased pricing. Consequently, Seagate's Non-GAAP gross margins have expanded significantly, reaching 30.9% from 26.1% in the previous quarter and 19.5% the previous year.
The analysts highlighted that the strategic manufacturing adjustments made during the downturn have enabled Seagate to achieve over 30% gross margins even with one-third lower revenue. This has provided substantial earnings leverage for the company.
In light of these developments, Rosenblatt has revised its estimates and set a new 12-month price target of $125. The firm continues to recommend Seagate stock, emphasizing the company’s leadership in HDD technology, operational expertise, and investor-friendly capital allocation policy.
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