Seagate Technology (STX) - Get Report advanced Monday 1.6% to $57.89 after an analyst at Stifel upgraded the data storage company to buy from hold and boosted his price target to $70 from $62 a share.
Analyst Patrick Ho said the Dublin-based company's recent share weakness has created an opportunity to get more positive from both a fundamental and valuation perspective.
Seagate is scheduled to release second-quarter earnings results Tuesday after the market closes. Analysts are expecting the company to report earnings of $1.31 a share. Revenue is forecast to total $2.72 billion, up 0.2% from the year-earlier quarter.
Ho said that he believes Seagate's momentum continues in the near-term data center/hyperscale environment.
"Some of the momentum we began to see in CY-2H19 will carry into 2020 and this will benefit Seagate and the industry as a whole as new nearline capacity drives are added," Ho said.
Western Digital on Friday reported adjusted earnings of 62 cents a share, topping the consensus estimate of 58 cents. Revenue was flat with a year earlier at $4.2 billion, matching analyst estimates.
Ho said there is likely to be a "more favorable turn in 2020 driven by an improved competitive positioning on the nearline capacity drive front.”
In November, Seagate Technology reported net income in its fiscal first quarter of $200 million, or 74 cents a share, down from $450 million, or $1.54 a share, a year earlier. Revenue was $2.58 billion, down from $2.99 billion.