Brean Capital Dramatically Raised PT on Seagate and Western Digital

Brean Capital analyst Ananda Baruah significantly raised the price target on Seagate Technology STX and Western Digital WDC. Baruah reiterated a Buy rating on Seagate Technology and raised the price target from $55 to $70. The analyst also reiterated a Buy on Western Digital and increased the price target from $85 to $125. Brean Capital reported that catalysts are in place and remain understated for a “very dramatic appreciation” of these companies. The analyst expects the HDD industry's gross margin expansion to gain 50bps+ annually due to consolidation. Brean capital noted that enterprise and cloud demand is having a positive impact on TAM and mix. Baruah expects the HDD industry annual total addressable market to remain at approximately 134-140 million versus the consensus which expects a 5-10% annual TAM decline. Seagate Technology closed at $52.49 on Thursday and shares have traded as high as $55.71, a 6.13% increase. Shares of Western Digital closed at $82.10. Western Digital has traded up 1.73% at $83.52.