Seagate Technology (STX): Management Meetings Highlight the Disconnect Between Strong Fundamentals and Weak Sentiment

STX fundamentals remain strong: revenues and pricing are accelerating, the supply/demand gap is widening, and buybacks could reach roughly 30% of market cap in 2.5 years, yet shares trade at just 5x our CY28 EPS (or about 3x our bull case). Following a 3-day roadshow with CFO Gianluca Romano and Head of IR Shanye Hudson, we walk away with more conviction in our Overweight thesis. Over the last 3 months STX shares are down 43% and 59% off 52-week highs while our FY27/FY28 EPS estimates have moved 25-50% higher, leaving shares at 5.2x our CY28 EPS of $89.21 and 3.4x our bull-case CY28 EPS, below historical trough multiples for HDDs. Management meetings indicate AI tailwinds to HDD demand are still early innings but are accelerating EB demand, leaving the supply/demand gap wider today than three months ago; pricing is accelerating and more than offsetting component cost inflation to drive strengthening incremental margins; customer visibility is improving and elongating; and HAMR commerci