UPDATE: Jefferies Initiates Coverage On Seagate Technology

Jefferies initiated coverage on Seagate Technology PLC (NASDAQ: STX) with a Buy rating and $70 price target.

Analysts led by James Kisner expected "the company will benefit from: 1) robust storage growth in public and private clouds; 2) growth opportunities in flash-based storage via the company’s recent acquisition of LSI's Flash/SSD assets from Avago; 3) increasingly benign industry dynamics."

Kisner also looked "favorably on the Xyratex acquisition, which gives the company unique positioning to deliver custom system-level storage products to the Cloud."

Based on Kisner's analysis and conversations with industry contacts, he believed "that IT and storage assets are aging and will ultimately require investment to build out the hybrid cloud" and he saw Seagate as one of the greatest beneficiaries of this trend.

The report's EPS estimates were $5.04 for 2014 and $5.58 for 2015. The P/E valuation was 11.3x for 2014 and 10.2x for 2015.

Seagate Technology PLC recently traded at $56.32, up 0.16 percent.