UPDATE: Auriga Raises Target on Seagate to $38

Auriga reiterates its Buy rating on Seagate (NASDAQ: STX) and raises its price to $38 from $32 as the company beats twice-increased estimates and guides massive upside for next quarter.

Auriga comments, "Seagate beat December estimates and massively increased forward guidance. With strong pricing likely to persist for at least a year and longer term supply agreements providing stable unit outlook beyond that, Seagate is finally proving to skeptical investors just how much they are benefiting from the Thai floods. With over $11 in F13 EPS and over $4.5Bn in F13 free cash flow now expected, Seagate shares continue to look substantially undervalued."

STX closed at $21.14 a share yesterday.