What Happened:

Shares of knowledge storage producer Seagate (NASDAQ:STX) jumped 9.9% within the afternoon session after Morgan Stanley analyst upgraded the inventory’s ranking from Equal Weight (Neutral) to Overweight Buy) and raised the worth goal from $73 to $115. The new worth goal implied a possible 20% upside from the place shares traded when the improve was introduced. The analyst added, “Our bottom-up analysis indicates that STX’s long-term [gross margin] range could be 32-35% (vs. mgmt’s 30-33% target), and we are 200-300bps ahead of Street GMs in FY25/26…We also believe Gen AI will be a longer-term ‘rising tides lifts all boats’ tailwind for storage, causing us to raise our FY26-27 HDD exabyte forecast by 4%.”

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What is the market telling us:

Seagate Technology’s shares are considerably risky and over the past yr have had 6 strikes higher than 5%. In context of that, right now’s transfer is indicating the market considers this information significant however not one thing that may basically change its notion of the enterprise.

The largest transfer we wrote about over the past yr was 7 months in the past, when the corporate dropped 6% on the information that Barclays analyst Tom O’Malley downgraded the inventory’s ranking from Overweight (Buy) to Equal Weight (Hold) and assigned a worth goal of $65. The analyst added, “The Nearline recovery continues to take longer than expected, with [the first-quarter of 2024] now our best case scenario for a material unit uptick,”

Seagate Technology is up 15.2% because the starting of the yr, and at $95.17 per share it’s buying and selling near its 52-week excessive of $98.63 from March 2024. Investors who purchased $1,000 value of Seagate Technology’s shares 5 years in the past would now be an funding value $2,017.

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