Morgan Stanley Sees Seagate Shares Nearly Doubling amid Storage Demand Surge

Seagate Technology Holdings could nearly double in value as demand for data storage continues to outpace supply, according to Morgan Stanley.

The investment bank rates Seagate Overweight and raised its 12-month price target to $1,200 from $1,187, implying about 82% upside from Monday’s closing price.

“We remain convicted in [hard disk drive] earnings upside despite an elongated catalyst path,” analyst Erik Woodring said in a note to clients. “Stronger demand and pricing checks support beat-and-raises, while the current valuation discounts an overly punitive cycle-end, and we see favorable tactical setups.”

Demand for hard disk drives has recently exceeded available supply, creating a shortage of 400 exabytes, according to HSBC. Woodring said the hard disk drive market resembles the memory market a year ago, with margins remaining well below peak levels and pricing accelerating toward a more meaningful inflection.

Seagate’s recent spot transactions were priced at two to five times contracted rates, which Woodring said could provide additional support for the company’s shares.

Morgan Stanley’s bullish view aligns with Wall Street consensus. Of the 27 analysts covering Seagate, 24 rate the stock a Buy or Strong Buy, while three rate it Hold, according to LSEG data.

Seagate shares have fallen 23% over the past month but remain 140% higher year to date and 208% higher over the past 12 months.

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