Brean Murray Lowers Price Target On Seagate (STX)

Brean Murray Carret & Co. is lowering its price target on Seagate Technology (NASDAQ: STX) to $16 from $18, but is keeping its Buy rating after the company announced it would not be going private.

In a note sent to investors, Brean Murray writes, "Seagate announced the termination of its exploration to go private due to valuation – we believe the shares will come under pressure in the near term given some investors were holding the shares in the hope a deal would materialize. While we'd still expect downside to around $11-12 as we'd previously envisioned, it could be somewhat cushioned as management provided Dec Q guidance suggesting EPS of $0.33-0.35 (vs. Street of $0.29) as well as a $2B share-repurchase authorization – it also stated Dec Q revenue is expected to be $2.7B (in line with Street) and gross margins of at least 19.5 % (we believe 50bp) stronger than Street."

Shares of STX are down 66 cents to $13.20, a loss of 4.76%.