Seagate Tech (STX – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Asiya Merchant from Citi maintained a Buy rating on the stock and has a $125.00 price target.
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Asiya Merchant has given his Buy rating due to a combination of factors that highlight Seagate Technology’s strategic positioning and potential for increased profitability. The company’s shift towards a build-to-order model enhances predictability in its operations, while the anticipated mid-2025 ramp-up of Heat-Assisted Magnetic Recording (HAMR) technology supports a transition to higher-capacity, higher-margin products. This mix shift is expected to contribute to structurally higher profitability in a favorable pricing environment, reaffirming confidence in the company’s stock.
Additionally, the hard disk drive (HDD) industry is currently in a stronger position, focusing more on profitability as opposed to gaining market share, which was prevalent before the 2022-2023 correction. With the implementation of build-to-order strategies, Seagate has successfully eliminated quarter-end deals, stabilized pricing, and secured forward visibility from customers. This strategic focus, coupled with the company’s roadmap for HAMR technology and controlled production capacity, positions Seagate well to support expected demand growth without the need for increased R&D spending. Merchant’s analysis suggests a favorable share price return, underpinning the Buy recommendation.
In another report released on January 22, TD Cowen also assigned a Buy rating to the stock with a $135.00 price target.
STX’s price has also changed slightly for the past six months – from $93.680 to $96.540, which is a 3.05% increase.