In a report released yesterday, Wamsi Mohan from Bank of America Securities reiterated a Buy rating on Seagate Tech (STX – Research Report), with a price target of $112.00.
Wamsi Mohan’s rating is based on the favorable conditions in the Hard Disk Drive (HDD) industry, which is experiencing a strong cyclical upturn. The increasing demand from sectors such as cloud computing, artificial intelligence, and video storage is expected to drive growth, positioning Seagate Tech to expand its revenues and margins. Mohan’s analysis suggests potential upside in revenue and margins for Seagate, assuming no further issues with their Heat-Assisted Magnetic Recording (HAMR) technology.
Despite adjusting the price objective from $130 to $112 due to a higher projected tax rate, Mohan reiterates the Buy rating. This is supported by secular demand trends, recovery in revenue and margins from previous low levels, and the company’s path to higher capacity. The anticipated increase in nearline HDD unit shipments and the ramp-up of HAMR drives are expected to contribute positively to Seagate’s financial performance in the coming years.
In another report released on February 27, Morgan Stanley also reiterated a Buy rating on the stock with a $138.00 price target.