Barclays Analyst Boosts Seagate Price Target Amid Optimistic Industry Outlook

Barclays analyst Tom O'Malley has increased Seagate's (STX) price target from $125 to $180, maintaining an Equal Weight rating. The positive outlook reflects the company's progress in heat-assisted magnetic recording technology and a favorable view of the HDD sector. Seagate's financial health is underscored by strong revenue growth, efficient cost management, and a current ratio of 1.38. However, the debt-to-equity ratio is negative, and insider selling activity has been significant. The company's valuation metrics show a P/E ratio of 24.7 and a P/S ratio at a 10-year high of 3.98, indicating potential overvaluation.

Seagate Technology Holdings plc (STX) has seen a significant boost in its stock performance, with analysts raising their price targets and highlighting the company's strong financial health. Barclays analyst Tom O'Malley recently increased Seagate's price target from $125 to $180, maintaining an Equal Weight rating. This positive outlook reflects the company's progress in heat-assisted magnetic recording (HAMR) technology and a favorable view of the HDD sector.

Seagate's recent financial results have been impressive, with the company reporting a 36.29% revenue growth in the June quarter, driven by increasing demand for cloud computing and record Nearline drive shipments. The company's Nearline drives are fully booked through mid-2026, reflecting the growing need for data storage solutions in the cloud sector [1].

The company's strong financial performance is also evident in its gross margins, which reached a record high for the ninth consecutive quarter in the fiscal fourth quarter of 2025. Seagate's non-GAAP gross margin climbed to 37.9%, expanding 170 basis points (bps) sequentially and nearly 700 bps year over year. This improvement was fueled by robust demand for high-capacity nearline drives, strong pricing discipline, and greater adoption of HAMR technology [2].

However, Seagate faces potential challenges. The company's corporate tax rate is expected to rise significantly to mid-teen percentages in fiscal year 2026 due to the global minimum tax's Pillar Two framework, which could impact its profitability. Additionally, the company's debt-to-equity ratio is negative, and insider selling activity has been significant, which may indicate potential concerns among management and insiders [1].

Despite these challenges, Seagate's stock performance has been driven by strong market demand for its products and services. The company's strategic advancements and ability to capitalize on the growing data storage market have contributed to its impressive stock performance. Analysts have responded positively to these developments, raising their price targets and maintaining an optimistic outlook for the company.

In conclusion, Seagate Technology's stock performance reflects a strong market position and robust demand for its data storage solutions. The company's ability to adapt to market trends and capitalize on growth opportunities has contributed to its impressive stock performance. However, investors should be mindful of the potential impact of the rising corporate tax rate on the company's future profitability.

References:
[1] https://www.ainvest.com/news/seagate-technology-reports-36-revenue-growth-june-quarter-driven-nearline-drive-demand-2508/
[2] https://www.nasdaq.com/articles/will-cloud-and-ai-growth-help-seagate-preserve-its-margin-momentum