Bernstein has increased its price target for Seagate Technology (NASDAQ:STX) to $500.00 from $370.00 while retaining an Outperform rating, citing a combination of stronger-than-expected pricing and faster-than-anticipated cost reductions tied to HAMR technology. The new target sits just below the analyst high of $505.00, with Seagate shares trading at $448.60, close to a 52-week peak of $449.50.
The analyst action follows Seagate’s fiscal second-quarter 2026 results, which outperformed expectations across multiple metrics. The company reported adjusted earnings per share of $3.11, with revenue and margins also exceeding forecasts. Bernstein highlighted that average selling prices (ASPs) came in ahead of its assumptions, supporting the better-than-expected financials.
Bernstein additionally pointed to earlier and larger-than-expected cost reductions associated with heat-assisted magnetic recording (HAMR) materials. Those cost improvements, the firm said, contributed materially to the improved margin profile.
Looking ahead, Seagate provided guidance for fiscal third-quarter 2026 adjusted EPS of $3.40, a figure that the analyst noted substantially eclipses both its own estimate and the broader Wall Street consensus of $3.00. Bernstein anticipates that the combination of firm pricing and continued HAMR execution will sustain the favorable earnings trajectory.
InvestingPro data indicates that seven analysts have revised their earnings estimates upward for the coming period, a development consistent with the stronger guidance and results.
Management's commentary emphasized that demand is healthy while supply remains disciplined. Company leadership confirmed that volumes are secured for calendar year 2026; however, pricing is expected to increase only modestly, trending up by low single digits quarter-over-quarter, rather than jumping sharply.
The stock has reacted strongly to the fundamental beats and outlook, gaining 27.82% in the past week and 354.34% over the last year. Despite the run, InvestingPro’s Fair Value assessment suggests the shares may now be overvalued, even as the company receives a "GREAT" overall financial health score.
Additional detail on the December quarter shows Seagate generated $2.83 billion in revenue, surpassing the consensus estimate of $2.70 billion, while reported EPS of $3.11 topped the expected $2.75. For the March quarter (fiscal third quarter), Seagate projected revenue of $2.90 billion and adjusted EPS of $3.40.
Those results and forward-looking figures prompted several firms to raise their price targets. Cantor Fitzgerald increased its target to $500, citing Seagate’s robust gross margins, which were 42.2% in the December quarter and are expected to reach 44.0% in the upcoming quarter. Mizuho lifted its target to $440 and pointed to strength in cloud demand. Bank of America Securities and Morgan Stanley raised their targets to $450 and $468, respectively, noting the company’s strong performance metrics. UBS, while maintaining a Neutral rating, raised its target to $385 and highlighted improving margins and solid execution.
The cluster of upgrades reflects a broad reassessment of Seagate’s near-term earnings power and margin outlook driven by pricing resilience and HAMR-related cost benefits. At the same time, valuation metrics flagged by InvestingPro indicate a potential premium relative to fair value despite the favorable operational picture.
Bottom line: Bernstein’s price-target increase to $500 and maintained Outperform rating follow a string of outperforming results and optimistic guidance from Seagate, underpinned by stronger-than-expected ASPs and earlier HAMR-driven cost reductions. Multiple peer analysts have similarly raised targets, while valuation measures suggest the stock may now trade at a premium.