Susquehanna doesn’t believe the worst is over for Seagate Technology (ticker: STX) stock.
On Tuesday, the storage-technology company gave an adjusted earnings-per-share forecast of 70 cents for its March quarter versus the Wall Street consensus of $1.04.
The analyst cited weakness in demand for Seagate’s storage offerings from cloud-computing vendors. He noted the company’s financial forecast also pointed to market-share losses to Western Digital (WDC). In addition, Seagate’s gross-profit margin guidance of “at least 26%” for the March quarter was significantly below the 29.7% expected by Wall Street, he said.
Hosseini lowered his fiscal 2019 EPS forecast to $4.47 from $4.75 versus the Wall Street consensus of $4.75. He has a $32 price target for the shares, implying shares can fall nearly 30%.
The Seagate “story needs more than just a 2H rebound,” he wrote. “Long-term secular challenges remain.”