Cantor Fitzgerald elevated its 12-month price target on Seagate Technology (NASDAQ:STX) to $500.00 from $400.00 and reaffirmed an Overweight recommendation following the storage company’s most recent quarterly report.
The research house said Seagate delivered a "solid beat and raise" quarter, with gross margins identified as the central factor behind the outperformance. Seagate reported gross margins of 42.2% for the December quarter, above consensus of 40.9%. For the forthcoming quarter, the company guided to at least 44.0% gross margin versus the 42.0% consensus figure noted by analysts.
Cantor Fitzgerald pointed to several operational and market dynamics supporting margin expansion:
- Pricing increases amid what the firm described as a "very tight" supply and demand environment for hard disk drives (HDDs).
- Elevated pricing for heat-assisted magnetic recording (HAMR) products.
- Approximately 10% annual cost reductions on a comparable basis.
The firm also emphasized Seagate’s demand profile over the coming years. According to Cantor Fitzgerald, calendar year 2026 exabytes are fully allocated, the company is building backlog for 2027, and customer discussions extend into 2028. Based on those conditions, Cantor Fitzgerald projects Seagate will produce roughly $6 billion of free cash flow across calendar years 2026-2027.
Following the reassessment, Cantor Fitzgerald raised its EPS estimates to $14.80 for calendar year 2026 and $18.00 for 2027. The firm indicated there are potential "stretch goals" of about $20+ in 2027 and $25+ in 2028, and kept Seagate as a top pick with an indicated upside of more than 25% from current valuation levels.
Seagate’s own reported results contributed to the analyst enthusiasm. For the most recent quarter the company recorded revenue of $2.83 billion and earnings per share of $3.11, each above consensus estimates of $2.70 billion and $2.75, respectively. For the March quarter, Seagate is projecting revenue of $2.90 billion and EPS of $3.40.
Market reaction among other firms was similarly positive, with multiple brokerages raising their targets: UBS raised its target to $385 citing strong execution and improved margins; Mizuho set a $440 target highlighting cloud demand strength; Bank of America Securities and Evercore ISI each moved targets to $450; and Morgan Stanley set a $468 target, noting strong performance across a range of metrics.
Contextual takeaway - The lift in price targets and consensus-beating quarterly metrics reflect a combination of stronger margin outcomes, pricing leverage in the HDD market and expected ongoing cost reductions. These elements are central to Cantor Fitzgerald’s more bullish revenue, EPS and free cash flow outlook for Seagate over the next several years.