Bank of America analysts have raised their price target on Seagate Technology Holdings PLC (NASDAQ:STX) to $605 from $450, citing stronger confidence in earnings growth and sustained demand ahead of the company’s upcoming quarterly report.
The firm also increased its forward estimates, projecting fiscal 2026 revenue of $11.7 billion and earnings per share of $13.65, up from prior forecasts of $11.4 billion and $12.97. The higher valuation multiple—25 times estimated calendar 2027 earnings, versus 23 times previously—reflects expectations for continued margin expansion and positive long-term estimate revisions.
The analysts said they expect Seagate to report fiscal third-quarter revenue of approximately $3.02 billion and earnings per share of $3.70 when it reports results after market close on April 28, both above current consensus estimates. Strength in data center demand is anticipated to offset typical seasonal weakness in edge and IoT markets during the March quarter.
Growth in cloud infrastructure and enterprise storage is expected to remain a key driver. Analysts estimate Seagate shipped roughly 186 exabytes of storage in the quarter, including about 1 million heat-assisted magnetic recording (HAMR) drives. For the full fiscal year, shipments of HAMR units are projected to reach around 7 million.
Looking ahead to the fiscal fourth quarter, Bank of America forecasts revenue of $3.2 billion and earnings per share of $4.20, again above consensus. Gross margins are expected to expand sequentially, reaching about 47.3%, supported by pricing strength and cost efficiencies tied to newer HAMR technologies.
The report highlights continued progress in HAMR adoption, with two customers having completed qualification of Seagate’s 40-terabyte drives. The transition from traditional perpendicular magnetic recording (PMR) to higher-capacity HAMR products is expected to support margins, with incremental margins projected to exceed the company’s long-term 50% target.
Analysts also pointed to improved visibility from long-term contracts, noting that much of Seagate’s nearline storage capacity for calendar 2026 is already covered by orders, with some purchase commitments extending into early 2027.