Key Takeaways
- Seagate shares fell 15% in the past week as Sandisk, Micron and other storage stocks sold off after the midterms.
- Seagate had no bad news of its own: a week earlier, it posted record profit and guided December-quarter revenue to $4.8 billion.
- Morgan Stanley kept its $1,148 target on Nov. 6.
- The stock looks like a buy if late-January results land near guidance, and Washington’s AI talk is the main risk.
Seagate Technology (STX) stock is down 15% in the past week, and Seagate didn’t report a thing to cause it. The post-election sell-off in AI stocks also dragged Sandisk (SNDK) down 17% and Micron (MU) down 12%.
Morgan Stanley’s Erik Woodring thinks the market has it wrong. On Friday, he kept his Overweight rating and $1,148 target, pointing to a disconnect between Seagate’s “strong fundamentals and weak sentiment.”
Washington spooked every storage stock
The selling started Wednesday, after Democrats won both houses of Congress. Investors were weighing talk of a Texas data center moratorium. Then Arizona Rep. Yassamin Ansari called on X for a pause on advanced AI development. A day later, Bloomberg reported that Micron had paused a $4.5 billion plant in Taiwan. Seagate fell 15.4% that day alone.
All three sell into the same AI data centers, so the question is whether Washington’s talk slows orders. So far, the AI pause bill Ansari helped introduce in September hasn’t left committee.
Seagate’s business just set a record
Seagate’s fiscal first quarter, ended Oct. 2, brought record profit. Revenue rose 61% to $4.23 billion, and adjusted EPS hit $7.68. Free cash flow hit a quarterly record of $1.5 billion. Management guided December-quarter revenue to $4.8 billion.
Analysts expect normalized EPS to more than double this fiscal year.
Nothing Seagate reported or said last week gives analysts a reason to cut those numbers.
TIKR tracks 26 analysts on Seagate Technology. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Seagate Technology, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Seagate Technology’s Analyst Ratings
Is Seagate a buy at less than half its June high?
On CNBC’s Closing Bell, Woodring said Seagate’s revenue and pricing are accelerating. The valuation leaves plenty of room. On Friday, Seagate’s forward P/E was 9.8x, far below its five-year average of 26x.
Monday’s 10% bounce left it at about 11x. Morgan Stanley’s target works out to about 24x forward earnings, still under that average. The Street’s average target is $1,045, about twice Monday’s close.
Risks remain: Ansari’s bill gains traction or Texas imposes a moratorium, and Seagate hasn’t set its 2028 prices with customers yet. Still, I think Seagate is a buy at this price. If December-quarter revenue lands near guidance in late January, Morgan Stanley’s target will look a lot more reachable.
So what is Seagate stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Seagate could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
