Analyst Note| William Kerwin |
Seagate reported solid earnings as the firm beat our expectations for both the top and bottom lines, and guided for sequential growth for the upcoming third quarter. The firm also saw strong year-over-year growth in nearline shipments. Although nearline shipments have come down from their peak recorded in the June quarter, management is guiding for sequential growth on both top and bottom lines for the March quarter. We are maintaining our fair value estimate of $42 for no-moat Seagate. With shares trading at $60, we recommend a pullback before investing.