Hoefer & Arnett Downgrades Recommendation on Seagate (STX) From Hold to Sell SAN FRANCISCO, July 21 /PRNewswire/ -- Hoefer and Arnett Technology Analyst, Mark Miller, has downgraded Seagate from a hold to a sell. While we see seasonal factors and new products lifting Seagate's share and margins, we believe intense competition in the desktop, mobile and enterprise markets will continue well into next fiscal year. As such, we believe Seagate's gross margins will fall from its historic range of 24% to 26% to 18% to 20% in fiscal 2005. Using these margins in our model only provides a net income of $222.7 million or $0.48 per share for Seagate in fiscal 2005. Based on the historic PE range of 13 to 15, it appears Seagate is significantly over valued at its current price. Hoefer & Arnett Incorporated is a member of the National Association of Securities Dealers, CRD number 10883. DATASOURCE: Hoefer & Arnett Inc. CONTACT: Mark Miller, Analyst, +1-415-362-7111, or , or Sharlena Bolden, Research Coordinator, +1-415-362-7111, or , both of Hoefer and Arnett Web site: http://www.hoeferarnett.com/

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