UBS has increased its 12-month price objective for Seagate Technology (NASDAQ:STX) to $385 from $335, while keeping a Neutral rating on the shares. The new target sits near Seagate’s 52-week high of $383.88; the stock was trading at $371.76 at the time of the update.
Analyst rationale and financial performance
UBS analyst Timothy Arcuri pointed to Seagate’s execution and rising gross margins as central reasons for the target adjustment. Over the last twelve months Seagate delivered 31.56% revenue growth and posted a 37% gross profit margin, metrics the firm said underscore improving profitability against a backdrop of robust demand.
The analyst also endorsed Seagate’s order approach, noting the company is accepting orders only within current lead times - roughly 52 weeks - a practice Arcuri described as an "eat as you go" strategy. He suggested this is preferable to building up a large backlog of orders that might never be fulfilled.
Technology milestones
UBS highlighted progress on Seagate’s HAMR - Heat-Assisted Magnetic Recording - technology. According to the note, HAMR has been qualified by all major U.S. hyperscalers, and higher-density HAMR drives are expected to be rolled out in the near term. The firm views these advances as supportive of long-term product competitiveness and capacity scaling.
Earnings revisions and valuation
Even as UBS increased its earnings-per-share estimates by 13-22% across fiscal years 2026 through 2028, it held to a Neutral stance. The firm flagged valuation as a constraint, observing that the shares appear to be discounting a sustained continuation of the current uptrend. UBS noted the stock’s price-to-earnings ratio of 48.42 is well above Fair Value, referencing InvestingPro data that also shows seven analysts recently raising earnings estimates for the coming period.
Recent operating results and peer reactions
Seagate reported fiscal second-quarter 2026 results that beat expectations. The company posted earnings per share of $3.11 versus analyst forecasts of $2.79, and revenue of $2.83 billion compared with expected revenue of $2.73 billion. For the March quarter, Seagate guided to revenue of $2.90 billion and earnings per share of $3.40.
Following these results, a number of brokerages raised their targets for Seagate. Mizuho lifted its target to $440, BofA Securities set a $450 target, Morgan Stanley raised its target to $468, and Evercore ISI adjusted its target to $450. These revisions reflect the company’s improvements in revenue growth, gross margins and operating margins, with demand in the data center market and higher exabyte shipments flagged as key contributors.
Outlook and context
UBS’s move to raise the price target while maintaining a Neutral rating captures a balance between acknowledging operational momentum and caution over the stock’s current valuation. Investors and market participants will likely watch upcoming results and demand trends in the data center segment closely, given their material influence on Seagate’s near-term performance.