Seagate Technology Positioned for Further Growth Despite Investor Concerns, Wedbush Says

MT Newswires Live00:18

Seagate Technology (STX) is positioned for further revenue and margin gains over the next few years amid supply constraints, despite investor disappointment over its fiscal Q2 gross margin outlook, Wedbush Securities said in a Wednesday note.

The investment firm said hard disk drive pricing and bits per unit will trend higher, generating steady revenue and margin gains over the next few years amid supply constraints.

Wedbush said Seagate's 1% sequential Exabyte shipment growth in fiscal Q1 and its fiscal Q2 gross margin forecast disappointed investors, but cautioned that these factors do not indicate a shift in trends.

The eventual alignment of cloud service provider long-term agreements with price increases seen elsewhere in the industry could generate additional step-function gains, analysts said.

Wedbush reiterated its outperform rating on Seagate and maintained its $1,000 price target.

Shares of Seagate were up 1.3% in Wednesday afternoon trading.

Price: 676.72, Change: +8.87, Percent Change: +1.33

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