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Seagate drops as analysts are bearish on fundamentals

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Shares of Seagate Technology fell nearly 6 percent Monday after analysts at JPMorgan released a bearish outlook on the firm.

In a Monday note, JPMorgan downgraded the stock to "underweight" from "neutral" and slashed its price target to $15 from $30, citing weak fiscal-third-quarter results and continuously deteriorating fundamentals.

"Seagate reported a weak FQ3, even after accounting for its negative preannouncement. The company proceeded to guide for an even worse FQ4 as falling revenues are not offset by lower opex," JPMorgan said, adding "we see structural weakness in end-market demand as PCs continue to be weak and flash adoption accelerates at the expense of high-performance HDDs." The added that the current dividend is "unsustainable given the company's earnings prospects."

The tech firm posted non-GAAP earnings per share of 22 cents on revenue of $2.6 billion on Friday. Analysts polled by Reuters expected the company to report earnings of 37 cents on revenue of $2.6 billion.

Seagate's stock has been under pressure recently, falling more than 44 percent in 2016 and nearly 66 percent in the past year.

STX this yearSource: FactSet

— CNBC's Michael Bloom and Reuters contributed to this report.

Disclosure: JPMorgan is a market maker for Seagate.