NEW YORK (TheStreet) -- Shares of Seagate Technology (STX - Get Report) were rising in mid-afternoon trading on Wednesday as Brean Capital raised its price target on the stock to $50 from $42 and reiterated a "buy" rating, the Fly reports.
The higher price target comes after the Cupertino, CA-based data storage company pre-announced fiscal 2017 first quarter results yesterday.
Seagate said operating expenses will grow quarter-over-quarter to $470 million in the first quarter. But the company also raised its revenue outlook to $2.8 billion from $2.7 billion for the period.
Shares slumped more than 7% following the announcement.
Brean said that Wall Street is underestimating Seagate's gross margin model, the Fly notes. Additionally, Seagate is ahead of schedule for returning to normalized earnings and free cash flow generation, the firm said.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C.
Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.
You can view the full analysis from the report here: STX