TLDR
- Seagate reported Q3 EPS of $4.10, beating the $3.47 estimate, with revenue of $3.11B vs $2.94B expected
- Q4 guidance of $4.80â$5.20 EPS came in well above Wall Street forecasts
- BofA raised its price target to $840 from $700, maintaining a Buy rating
- Rosenblatt set the most bullish target at $1,000; consensus sits at $669.75
- STX was trading around $642 on Wednesday, up roughly 10% on the day
Seagate Technology (STX) posted a strong fiscal Q3, beating both earnings and revenue estimates by a wide margin, sending the stock up nearly 10% on Wednesday.
Seagate Technology Holdings plc, STX
The company reported EPS of $4.10 for the quarter, well above the consensus estimate of $3.47. Revenue came in at $3.11 billion, topping the $2.94 billion the Street had pencilled in. That’s a 44.1% jump in revenue year-over-year.
Free cash flow for the quarter came in at roughly $1 billion, and the company posted record margins. The results landed as AI-driven demand for data storage continues to put pressure on hard disk drive supply.
Q4 guidance was equally strong. Seagate set EPS guidance of $4.80 to $5.20, and revenue guidance of roughly $3.4B to $3.6B â both ahead of analyst expectations.
Pricing also moved in the right direction. The company reported a 6% increase in dollars per terabyte, both year-over-year and quarter-over-quarter.
Analyst Targets Move Higher
BofA Securities raised its price target to $840 from $700, keeping its Buy rating intact. The firm pointed to tight HDD supply, strong AI demand, and well-controlled operating expenses as key factors. BofA also noted that the shift to heat-assisted magnetic recording (HAMR) drives is helping bring costs down year-over-year.
Rosenblatt went furthest, doubling its target from $500 to $1,000 and rating the stock a Buy. JPMorgan raised its target to $775 with an Overweight rating. Citigroup moved its target to $740, also with a Buy. The consensus price target now sits at $669.75 across 25 analysts, with 20 rating it a Buy and five at Hold.
UBS was the outlier, raising its target only slightly from $515 to $545 while keeping a Neutral rating â a target that implies roughly 15% downside from recent levels.
Supply and Demand Picture
Nearline capacity is almost fully allocated through calendar year 2027. Seagate has also been finalizing build-to-order contracts through the end of fiscal 2027, locking in both configuration and pricing. That gives the company unusual visibility into future revenue.
BofA said it expects continued growth in pricing, margins, and cash flow through fiscal 2027, and noted that six analysts have revised earnings upward for the upcoming period.
The stock has climbed 619% over the past 12 months. It was trading at $642.62 on Wednesday, up $63.59 on the day, on volume of nearly 6.9 million â well above its average of 4.1 million.
On valuation, the stock trades at a P/E of around 72.6, and carries a debt-to-equity ratio of 7.63 â metrics some analysts flag as a risk if AI spending slows.
Seagate also declared a quarterly dividend of $0.74 per share, with a record date of June 24 and payment date of July 7.
CEO William Mosley sold 20,000 STX shares on April 1 at an average price of $420.73, a transaction totalling $8.4 million, executed under a pre-arranged Rule 10b5-1 plan.
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