Citi Raises PT On STX To $25

Citi has raised its price target on Seagate Technology (NASDAQ: STX) from $23 to $25 based on the company's 1CQ results, which were reported in line preannouncement numbers, reported April 7.

Says Citi, in the report, “As expected, guidance was cautious (flat to slightly down TAM, and qoq decline in gross margin), but this was expected given the lack of visibility on demand and supply. Meanwhile, the company announced an agreement to acquire Samsung's hard disk drive assets in a $1.38B stock/cash deal, which follows WDC's announcement to acquire HGST just over a month ago. While we are obviously encouraged by the recent flurry of M&A activity and the positive long-term implications to industry dynamics (ie. pricing discipline), we reiterate that our constructive view of HDD shares in the next 6-9 months continues to be primarily based on improving cyclical metrics (capex push-outs, inventory reductions, firmer pricing) that should drive meaningful gross margin and EPS revisions through the year.”

Citi reiterates its Buy rating on the stock.

STX closed yesterday at $17.93.