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

Seagate Know-how (NASDAQ:STX) dipped almost 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 ranking on Seagate (STX) to impartial, and lowered his value goal on the corporate’s inventory to $55 a share from $85 as a result of a number of damaging components dealing with 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 gadgets, 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 in need of Wall Road’s prior estimates for a revenue of 80 cents a share on $2.1B in income.

In an announcement, Seagate (STX) Chief Govt Dave Mosley cited “international financial uncertainties and broad-based buyer stock corrections” that bought 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’s going to shed roughly 3,000 jobs, and mentioned it was beneath investigation by the U.S. Commerce Division on expenses of violating rules associated to illegally promoting exhausting drives to an organization that’s beneath U.S. sanctions. Varied reviews 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 elementary set-up that’s fairly good” for Seagate (STX). Arcuri added that whereas it’s exhausting to estimate the end result of the Commerce Division inquiry, Seagate (STX) might be slapped with penalties of as a lot as two occasions the worth of the offers.

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