Fitch lifts Seagate view to stable

Fitch Ratings said it affirmed Seagate Technology plc's long-term issuer default rating at BBB-, along with the BBB- long-term issuer default rating on its wholly owned subsidiary, Seagate HDD Cayman.

Fitch also said it revised the outlook to stable from negative.

The ratings and outlook reflect expectations for modest revenue growth through the cycle, the agency said, and near-term demand headwinds that likely will persist through most of 2019 and curtail free cash flow.

Fitch said it expects robust long-term demand for capacity drives from cloud service providers.

Surveillance and gaming customers will drive revenue growth, the agency said.

Profitability will remain cyclical, but the richer sales mix and lower operating expense benefits should result in higher and less uneven profit margins, Fitch said.

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