Computer hard drive maker Seagate Technology (
) on Friday received a big downgrade from analysts at
The firm cut its rating on STX from "Buy" all the way down to
"Sell" and reduced its price target from $37 to $25. That new
target suggests a nearly 12% downside to the stock's Thursday
closing price of $28.25.
A Citigroup analyst commented, "We are revising down our 4CQ12
EPS estimates by 23% to $1.40 based on lower unit shipments of 58M
(from 63M) and lower GM of 28.7% (from 30.5%). This is driven by
our lowered 4CQ TAM assumption of 140M (vs guidance of 150-155M).
We anticipate that GM will be pressured by low utilization, normal
price declines, and lower mix of enterprise. For CY13, we are
revising down our EPS to $6.01 (from $6.98) given lower shipments
of 240M (from 254M) and a more conservative GM assumption of 28.3%
Seagate shares fell $1.03, or -3.7%, in premarket trading
The Bottom Line
Shares of Seagate Technology (
) have a 4.53% dividend yield, based on last night's closing stock
price of $28.25. The stock has technical support in the $25-$26
price area. If the shares can firm up, we see overhead resistance
around the $30-$32 price levels.
Seagate Technology (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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