STX – Market expectations are for Uniform ROA to fade, management may also have concerns about profitability, macro uncertainty, and storage capacity
- Seagate Technology Holdings plc (STX) currently trades below corporate but around historical averages relative to Uniform earnings, with a 15.5x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to fade to 8%, accompanied by 3% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to improve to 11% in 2023, accompanied by immaterial Uniform asset shrinkage.
- If sustained going forward, these levels would imply a stock price closer to $136.18, representing approximately 49.05% equity upside for the firm.
- That said, the firm’s most recent earnings call suggests management may have concerns about profitability, macro uncertainty, and storage capacity.