Wedbus Raises Seagate Price Target To $20

According to Wedbush, Seagate Technology (NASDAQ: STX) margins are likely to improve with industry consolidation.

Wedbush said that it is raising the price target to $20 from $17. “We believe that the fundamentals of HDD stocks (STX and WDC) are improving, which provides a buying opportunity for the near-term. Raising our 12 month Price Target to $20. We are maintaining our NEUTRAL rating, keeping in view the longer term impact of cannibalization of notebooks with tablets and HDDs with SSDs. Our price target is based on a PE of 9x our fiscal 2012 estimated EPS of $2.13. The multiple is based on historically lower multiples for HDD vendors compared to peers in storage systems and IT Hardware.”

Seagate Technology closed yesterday at $17.93.