.July 24, 2024 10:15 AM

Rosenblatt analysts raised Seagate Technology’s price target to $125 from $115, maintaining a Buy rating after the company’s Q4 earnings report led to a 5% pre-market stock price increase. The hike was due to higher demand from cloud service providers and video & imaging applications, along with a build-to-order strategy that improved manufacturing utilization and pricing. Seagate’s Non-GAAP gross margins rose to 30.9% from 26.1% in the previous quarter and 19.5% the previous year, thanks to strategic manufacturing adjustments made during the downturn.

The analysts noted that Seagate’s strategic manufacturing changes have allowed the company to achieve over 30% gross margins despite lower revenue, providing significant earnings leverage. Rosenblatt has adjusted its estimates and set a new 12-month price target of $125, recommending Seagate stock for its HDD technology leadership, operational expertise, and investor-friendly capital allocation policy.