Seagate loses extra floor as UBS downgrades as a consequence of a number of points

Seagate Know-how (NASDAQ:STX) dipped practically 2% on Thursday as UBS analyst Timothy Arcuri downgraded the storage tech chief following its disappointing quarterly outcomes and outlook, and plans to chop 3,000 jobs.

Acuri took down his score on Seagate (STX) to impartial, and lowered his value goal on the corporate’s inventory to $55 a share from $85 as a consequence of a number of detrimental elements going through the the hard-disk drive maker. Amongst these had been Seagate’s (STX) fiscal first-quarter outcomes and outlook that conspired to drive the corporate’s shares down by greater than 7% on Wednesday.

Seagate (STX) turned in a revenue of 48 cents a share. excluding one-time objects, on income of $2.04B, whereas analysts anticipated Seagate (STX) earnings of 71 cents a share on $2.1B in gross sales. For its fiscal second quarter, the corporate forecast earnings of 15 cents a share, on $1.85B in income, which fell wanting Wall Avenue’s prior estimates for a revenue of 80 cents a share on $2.1B in income.

In a press release, Seagate (STX) Chief Government Dave Mosley cited “international financial uncertainties and broad-based buyer stock corrections” that obtained worse within the quarter as among the many causes for the corporate’s poor efficiency and outlook.

Together with its new forecast, Seagate (STX) mentioned it is going to shed roughly 3,000 jobs, and mentioned it was beneath investigation by the U.S. Commerce Division on costs of violating rules associated to illegally promoting onerous drives to an organization that’s beneath U.S. sanctions. Varied experiences mentioned the corporate in query was China’s Huawei Applied sciences. Seagate (STX) has denied the allegations.

Arcuri mentioned the Commerce Division matter “merely creates an excessive amount of potential danger and offsets what’s in any other case a basic set-up that’s fairly good” for Seagate (STX). Arcuri added that whereas it’s onerous to estimate the end result of the Commerce Division inquiry, Seagate (STX) may very well be slapped with penalties of as a lot as two instances the worth of the offers.

Seagate (STX) shares at the moment have a consensus purchase score from Wall Avenue analysts, whereas Searching for Alpha authors give the corporate’s inventory a maintain score. Searching for Alpha’s quant system, which usually outperforms the inventory market, provides Seagate (STX) shares a score of maintain.