Seagate (STX) shares surged 6.3%, as analysts set a $1,400 price target after strong earnings

Key highlights

Wall Street raises price target
Institutional activity remains strong
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Seagate Technology's (STX) shares surged 6.3% after announcing quarterly revenue of $3.63 billion, a year-on-year increase of 48.5% and earnings per share of $5.71 (exceeding market expectations of $5.10). Management issued a guidance for earnings per share for the first quarter of 2027 of US$7.10 to US$7.50, which was significantly higher than Wall Street expectations. Several analysts have raised their price targets, with Rosenblatt Securities setting a street price target of as high as $1,400 and Barclays Bank raising its target price to $1,250. Institutional shareholding accounted for 92.87% of STX's total share capital, and a number of investment companies expanded their positions in the second quarter. Company insiders have reduced their holdings of approximately 191,765 shares in the past 90 days through a pre-arranged 10b5 -1 trading plan, for a total value of approximately US$161.9 million.

Seagate Technology (STX) shares rose 6.3% to open at $849.28 in Friday trading. This performance was driven by the company's strong earnings release and optimistic forward-looking guidance driven by accelerating demand for artificial intelligence storage infrastructure. Seagate Technology Holdings plc, STX

The data storage giant reported quarterly revenue to reach $3.63 billion, a 48.5% increase from the same period last year and exceeding Wall Street's $3.5 billion forecast. Earnings per share were $5.71, easily beating the market consensus forecast of $5.10 and $0.61 higher. Seagate's net profit margin was 26.11%, and its return on equity reached an impressive 369.98%. These indicators demonstrate excellent operating performance.

Looking forward to the first quarter of 2027, company leadership expects earnings per share to be between $7.10 and $7.50. Currently, analysts estimate full-year earnings per share for fiscal 2027 at $35.70 per share.

The outstanding results coincided with the strong performance of stocks in the memory and storage sector. SK Hynix rose 7% on the same trading day as market participants increased their configuration of companies that provide high-density storage solutions to AI data center infrastructure.

Wall Street raised its target price

After the financial report was released, analysts quickly adjusted their outlook forecasts. Barclays raised its price target to $1,250 from $1,000 while maintaining an "overallocation" rating. JPMorgan Chase raised its price target to $1,240 from $1,095, also giving it an "overallocation" rating.

Rosenblatt Securities set its most bullish target among analysts covering the stock, raising its price target to $1,400 from $1,300, with a "Buy" rating attached. So Shikwan raised his target price from US$775 to US$875 while maintaining a "neutral" stance.

The stock currently has a consensus rating of "moderate buy", with an average price target of $986 for all covered analysts.

Institutional activity remains strong

NI Acquisitions Company LLC established a new position in Seagate in the second quarter, acquiring 4,877 shares worth approximately $4.7 million. This position now accounts for 1.7% of the company's total investment portfolio, ranking the 16th largest position.

A number of other institutional investors have expanded their existing positions. Retirement Wealth Solutions increased its stake by 70.6% in the second quarter. Overall, institutional investors control 92.87% of the company's outstanding shares.

Seagate's 52-week trading range is US$183.02 to US$1,145.00. Year-to-date, the stock has returned 190.71%, highlighting the significant impact of AI storage trends on the company's valuation.

The company announced a quarterly dividend distribution of US$0.74 per share, scheduled to be paid by registered shareholders at the close on September 24 on October 7. This established an annualized dividend of $2.96 with a yield of 0.3%, and a dividend payout ratio of 21.33%.

Regarding internal transactions, in the past 90 days, company executives have disposed of a total of 191,765 shares worth approximately US$161.9 million. Chief Financial Officer Gianluca Romano sold 14,091 shares at $811.25 per share on Aug. 7. Executive Vice President Ban Teh sold 9,862 shares on Aug. 21 at an average price of $852.97. All sales are made under a pre-established trading schedule under Rule 10b5 -1. Internal personnel currently account for 0.79 per cent of total outstanding shares.