Citi has revised its outlook on Seagate Technology (NASDAQ: STX), increasing the stock’s price target to $140 from $125 and maintaining a Buy rating. This update follows Seagate’s recent Analyst Day—its first since 2021—where the company outlined aggressive growth targets and a new $5 billion share repurchase plan.
During the event, Seagate executives shared a forward-looking strategy aimed at achieving double-digit revenue growth and a 40% gross margin (non-GAAP) by fiscal year 2028. A major component of this plan is the continued development and deployment of Heat-Assisted Magnetic Recording (HAMR) technology, which is expected to drive future storage innovations, including a forthcoming 40TB hard drive.
The company emphasized strong market fundamentals, citing rising demand from AI applications and data center expansion as major catalysts for exabyte growth. Management reported a favorable balance between supply and demand, with over 12 months of visibility on customer needs and noted that current supply constraints prevent it from meeting all incoming order increases.
Seagate also revealed that three of the world’s eight largest cloud infrastructure companies have qualified its HAMR technology, a milestone that underscores its competitive position. The firm plans to extend its HAMR roadmap through 2028, with areal density enhancements projected into the next decade. Leadership believes this innovation will maintain Seagate’s significant cost advantage—estimated at six times lower—compared to solid-state drives (SSDs).
The recently announced $5 billion stock repurchase program is part of Seagate’s long-term commitment to delivering shareholder value. The buyback has no fixed end date, allowing for flexibility based on prevailing market conditions. In addition to this, Seagate has a consistent track record of shareholder returns, offering a 2.65% dividend yield and having paid dividends for 15 straight years.
According to Citi, the raised price target is based on a 12x price-to-earnings ratio, applied to earnings projections over the next two years. Citi has also upgraded its financial forecasts for Seagate, reflecting improved expectations for both revenue and profit margins.
Other financial institutions have echoed this positive sentiment. BNP Paribas Exane recently shifted its rating from Underperform to Neutral and raised its price target to $100. Meanwhile, Kerrisdale Capital issued a favorable analysis highlighting Seagate’s technical capabilities and strong positioning within the hard disk drive (HDD) market.
Currently valued at $23.1 billion, Seagate trades at a price-to-earnings ratio of 15.28x and is nearing its 52-week high. Data from InvestingPro indicates that 14 analysts have raised their earnings estimates in recent weeks, signaling growing investor optimism.
Investors will have another opportunity to engage with Seagate management during a site visit as part of Citi’s Silicon Valley Bus Tour on June 2, 2025.
