Stock Upgrades: Seagate

NEW YORK ( TheStreet) -- These stocks received upgrades to buy from TheStreet Ratings on Thursday:
  • Jones Lang LaSalle (JLL): B- grade from TheStreet Ratings with a $90.97 price target.
  • Gen-Probe (GPRO): B- grade from TheStreet Ratings with a $87.79 price target.
  • International Shipholding (ISH): B- grade from TheStreet Ratings with a $26.28 price target.
  • BRT Realty (BRT): B- grade from TheStreet Ratings and a $7.65 price target.
  • Denbury (DNR): B grade from TheStreet Ratings and a $21.78 price target.
  • Seagate Technology (STX): B grade from TheStreet Ratings and a $24.96 price target.

Shares of Seagate, the hard-disk drive maker, gapped up at Wednesday's open to $24.08 from $21.09 at Tuesday's close.

The company surpassed analysts' earnings expectations for its fiscal second quarter on Tuesday. Seagate reported earnings of $581 million, or $1.32 a share, which beat analysts' estimates of $1.08.

Brean Murray Carret analysts raised their price target on Seagate on Wednesday to $30 from $26 in part based on strong company guidance from Seagate.

"We'd be aggressively buying the shares here as we believe this is minimally a $30 stock (trading at just 2.8x our CY12 EPS)," the Brean Murray Carret analysts wrote in a report Wednesday.

Seventeen of the 24 analysts who cover Seagate rated it a buy. Six categorized it as a hold and one considered it a sell.

CEO Stephen Luczo said in the second-quarter earnings conference call that for the June quarter, the company expects its "supply chain capabilities will continue to improve, which will result in revenues of at least $5 billion and gross margins comparable to those expected for the March quarter. In light of the persistent supply-demand imbalances that we believe will exist throughout the calendar year, combined with greater visibility due to our LTAs, we currently expect a relatively benign pricing environment resulting in revenues of at least $20 billion for calendar year 2012."

Seagate's price-to-earnings ratio is 11.55, which is less than the S&P 500's 13.84. The stock reached a 52-week high on Wednesday at $26.15 and is trading close to that level on Thursday.

The stock closed at $25.53 on Wednesday. It has risen 55.67% year to date.

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-- Written by Alexandra Zendrian

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