What happened
On the back of an improvement in tech stocks generally and better-than-expected quarterly results, Seagate Technology (STX 1.58%) was recording double-digit increases in share price this week. According to data compiled by S&P Global Market Intelligence, the veteran storage company's share price was up by more than 16% week to date as of Friday before market open.
So what
The previous day, Seagate unveiled the figures for its second quarter of fiscal 2023. These showed that the company earned revenue of $1.89 billion, which was well down from the $3.12 billion in the same quarter the previous year. Yet the tally beat the $1.83 average analyst estimate.
As for the bottom line, Seagate's non-GAAP (adjusted) net income shrank even more dramatically, to $34 million ($0.16) from the year-ago profit of $543 million. Again, though, this represented a beat, and a convincing one at that -- prognosticators tracking the stock were collectively modeling $0.10 per share.
Blaming a challenging macroeconomic environment for its declines, Seagate CEO Dave Mosley said in the release, "We are executing our industry leading product roadmap, which positions us well as the markets ultimately recover."
Now what
As so often happens with companies that notch strong quarterly beats, particularly with net earnings, analysts were quick to raise their price targets on Seagate stock. While the ink from the second-quarter report was barely dry, a clutch of them upped their levels for the company.
One was Morgan Stanley's Erik Woodring, who bumped the price target $3 higher to $72 per share while maintaining an overweight (i.e., buy) recommendation. Woodring wrote in a new analyst note that the company is a recovery play, particularly now that big customer China is starting to distance itself from strict COVID-19 lockdowns.
