By Mackenzie Tatananni

Seagate Technology received a wave of supportive Wall Street commentary Wednesday, as the data-storage company's upbeat guidance inspired several analysts to raise their price targets on the stock.

Seagate stock climbed 8.7% to $87.71 on Wednesday, snapping a three-day losing streak. As of Wednesday morning, Seagate was the top stock in the S&P 500.

The sharp gains came as the broader market tumbled, with the S&P 500 and Nasdaq Composite falling 1.4% and 1.9%, respectively. The company's latest financial results had much to do with it.

Late Tuesday, Seagate reported March quarter adjusted earnings and revenue that topped analysts' forecasts. Fourth-quarter guidance also came in above expectations: Seagate called for adjusted earnings in the range of $2.20 to $2.60 a share and revenue of $2.4 billion, plus or less $150 million.

Citi Research analyst Asiya Merchant raised her target price to $105 from $90 to reflect "higher profitability" and boosted estimates across the board. She reiterated a Buy rating on Seagate shares.

In addition to the solid quarterly results and better-than-expected outlook, management indicated that there would be minimal tariff impact on demand in the coming quarter, Merchant noted.

The company added that demand for hard disk drives continues to exceed supply and that HAMR, or heat-assisted magnetic recording builds -- a type of magnetic data storage -- continue to ramp up.

"Stepping back, we expected a good quarter, and we got a great quarter," Merchant wrote. Looking forward, she believes strong end-market demand should allow the company to "build multiple quarters of solid execution against even higher expectations."

Morgan Stanley analysts led by Eric Woodring raised their price target to $99 from $89 to reflect Seagate's potential for future earnings, and reiterated an Overweight rating.

Management highlighted continuing cloud demand that is expected to last into the June quarter, Woodring noted. The company stressed that it saw revenue, gross margins, free cash flow, and other key metrics growing quarter-over-quarter through 2025.

Moreover, the latest results reflect no customer pull-forward; in other words, Seagate's customers aren't rushing to buy the company's products before the onset of any possible tariffs. In Woodring's view, "tariff costs (if any) could be passed through."

Wells Fargo analysts led by Aaron Rakers acknowledged Seagate's strong performance in the quarter, but lowered their price target to $105 from $120. The analysts maintained an Equal Weight rating.

In their view, the latest results should ease concerns over a tariff-induced slowdown in demand. But the analysts' reservations have less to do with ramping geopolitical tensions and more with industry conditions.

The team remains cautious on Seagate's competitive position versus Western Digital, shares of which were up 5.3% on Wednesday.

As competition mounts, "HAMR execution remains a key focus," the analysts wrote. They also expressed concern about Seagate's exposure to the "cannibalization" of flash and solid-state drives, or the trend of such storage devices increasingly replacing hard disk drives.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 30, 2025 11:52 ET (15:52 GMT)

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