BofA Securities has raised its 12-month price target on Seagate Technology (NASDAQ:STX) to $450 from $400 and reaffirmed a Buy rating on the company’s stock. The firm’s revised target is noted as sitting above the current analyst high target of $465, with Seagate shares trading at $371.76, according to InvestingPro data.
The price-target change follows Seagate’s fiscal second-quarter results, which outpaced expectations. Shares moved higher in after-hours trading after the earnings release, extending a strong run that has produced a 277.95% return for the stock over the past year.
BofA pointed to Seagate’s third-quarter revenue and earnings guidance as another reason for its more bullish target. The company’s guidance for revenue and earnings came in above both BofA Securities’ internal projections and consensus Street estimates. In addition, Seagate’s guidance for gross margin and operating margin for the third quarter each exceeded Street expectations by more than 100 basis points. The positive outlook has coincided with seven analysts recently revising their earnings estimates upward for the upcoming period.
Management reiterated confidence in reaching a 50% exabyte crossover of Nearline exabytes using HAMR (Heat-Assisted Magnetic Recording) drives in the second half of 2026. BofA described its view on Seagate as constructive, citing multiple supportive factors: strong AI and datacenter demand, tight supply-demand dynamics that are pushing pricing higher, strong incremental margins, and disciplined operating expense management that have contributed to material positive estimate revisions.
Independent of the BofA action, other brokerages also adjusted their outlooks following the quarterly report. Morgan Stanley raised its price target to $468 from $372 while maintaining an Overweight rating, and Evercore ISI lifted its price target to $450 from $330, keeping an Outperform rating. Both firms highlighted Seagate’s robust revenue growth and improvements in gross and operating margins as central to their decisions. Seagate’s guidance for the upcoming March quarter also exceeded market expectations, with margins cited as a notable strength.
Seagate’s fiscal Q2 2026 performance included earnings per share of $3.11, versus analyst forecasts of $2.79, and revenue of $2.83 billion, above the $2.73 billion consensus. The results reflected 21.5% year-over-year revenue growth and a 26% increase in exabyte shipments to 190 exabytes, driven largely by demand from the data center market.
Analysis
The combination of stronger-than-expected quarterly results, elevated guidance for the next quarter, and management signals around HAMR adoption appears to have prompted the upgraded price targets and sustained analyst optimism. Brokers cited tangible margin improvement and favorable supply-demand dynamics as the core drivers underpinning upward estimate revisions.
Key points
- BofA raised its price target to $450 from $400 and maintained a Buy rating on STX.
- Seagate beat Q2 estimates with EPS of $3.11 and revenue of $2.83 billion; exabyte shipments rose 26% to 190 exabytes.
- Other firms, including Morgan Stanley and Evercore ISI, also raised targets after the strong quarter; guidance for the next quarter exceeded expectations, especially on margins.
Risks and uncertainties
- Seagate’s outlook and elevated price targets rely on sustained AI and datacenter demand - a shift in that demand profile could affect revenue and pricing dynamics.
- The expected pricing upside is linked to tight supply-demand dynamics; if supply conditions loosen, pricing and incremental margins may come under pressure.
- Execution risk remains around the management goal of achieving a 50% exabyte crossover to HAMR drives in the second half of 2026, which is central to medium-term product and capacity assumptions.
Overall, analysts’ reactions reflect confidence in Seagate’s near-term financial trajectory and margin recovery, while also signaling that future outcomes remain dependent on market demand, supply conditions and successful execution of product transitions.