Goldman Sachs’ Laura Conigliaro pounded the table on Seagate (STX) Wednesday morning, noting that while conditions in the hard-drive industry continue to improve, Seagate’s stock has been under-performing the market and the hardware sector since its September 7 analyst day.
“We would buy STX shares now,” she writes. “In sharp contrast to earlier in the year, our recent checks on some of the industry’s most aggressive pricers, including Hitachi and Samsung, suggest that all of the hard drive companies are now resolutely focused on profitability over share gains, particularly in the troublesome 2.5-inch notebook drive space, leading to less aggressive pricing which should last at least through year end.”
Conigliaro says she thinks the company will beat it pre-announced earnings range of 62-66 cents a share for the current quarter; she says her December estimate of 72 cents - already above the consensus of 68 cents - also could be too low.
STX 1-yr chart: