UPDATE: Piper Jaffray Initiates Seagate Technology at Neutral on Balanced Outlook

In a report published on Monday, Piper Jaffray analyst Andrew J. Nowinski initiated coverage on Seagate Technology (NASDAQ: STX) with a Neutral rating and a $45 price target.

In the report, Piper Jaffray stated, "There are four key investment points supporting our Neutral rating. First, we view the migration of data to the cloud as a positive long-term growth driver for Seagate's revenue and gross margin. However, we are less optimistic with regard to potential operating margin expansion, as the company has already largely recognized synergies from the Samsung acquisition. Third, the company generates excellent free cash flow, though we believe Seagate may fall short of their goal of having 250 million shares outstanding by year-end 2014, due to the capital requirements for dividends and debt service. Finally, we are cautious around the expiration of long-term agreements with larger OEMs, which could cause market share erosion as the contracts wind down."

Seagate Technology closed on Monday at $45.45.