Morgan Stanley has upgraded its outlook on Seagate Technology Holdings, citing robust demand for hard disk drives (HDDs) that is currently outpacing supply. Analyst Erik Woodring noted that there is a significant shortfall of 400 exabytes in HDDs, which supports the potential for earnings growth despite a challenging market environment.
The investment bank raised its 12-month price target for Seagate from $1,187 to $1,200, reflecting a nearly 82% upside from the stock's recent closing price. Woodring emphasized that the current valuation of Seagate does not fully account for the expected recovery in pricing and margins, which are anticipated to improve as demand continues to rise.
He also pointed out that recent spot deals for Seagate's products have been priced significantly higher than contracted levels, suggesting further upside for the stock. This positive outlook aligns with broader market sentiment, as 24 out of 27 analysts currently rate Seagate as a buy or strong buy.
Despite a recent 23% decline in share price over the past month, Seagate's stock has still appreciated by 140% year to date and 208% over the past year, indicating strong overall performance in a volatile market