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Seagate Fell amid Semiconductor and Overall Market Weakness

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Stock fell close to 9% on October 26

The stock of storage company Seagate (STX) declined 8.94% on October 26 to close trading at $38.80. The stock has fallen 18% this month and 4% in 2018. Seagate stock is trading 38% below its 52-week high of $62.70. The stock seems to have been impacted by overall weakness that has resulted in declines for peers Western Digital (WDC) and Micron (MU) as well. The fall in NAND prices has led to a steep fall in stock prices.

WDC stock has fallen 24.5% this month, while Micron stock has declined 22%.

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Stock trading at a discount to average analyst target

While Seagate stock has corrected significantly this month, does this mean it is trading at cheaper valuations? The forward 2019 PE ratio for Seagate stands at 7.02X compared to revenue growth of 3.3% and earnings growth of 9.6%.

Analysts expect Seagate’s earnings to rise at a CAGR (compound annual growth rate) of 10.4% over the next five years. Analysts have an average 12-month target price of $54.65 for Seagate, indicating an upside potential of 41% for the stock.

Out of the 27 analysts tracking Seagate, three recommend a “buy,” 19 recommend a “hold,” and five recommend a “sell.”

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