SanDisk (SNDK) Bullish Stance Reiterated at Needham & Company Post Q2
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Needham & Company analyst Rajvindra Gill reiterated a Buy rating and $115 price target on SanDisk (NASDAQ: SNDK) following Q2 results, saying shares should reset after mixed guidance although the long-term outlook remains favorable.
SNDK nicely beat 2Q14 ests, but guided 3Q topline slightly lower than the Street ($1.70BN vs $1.74BN) due to unexpected supply constraints. With the stock up 40% YTD (vs 20% for SOX) and 7% in the past month (vs 4% SOX), expectations were clearly high entering into the print. SNDK saw a surge in SSD growth which required more 19nm bits, and hence reduced overall NAND supply, leading to slightly lower outlook. However, we believe this situation is temporary and we expect SNDK will add wafer capacity in the 4Q. Net, we think SNDK's improving mix to enterprise SSDs & embedded is a good model long term. Maintain Buy, $115 PT.
Shares of SanDisk closed at $107.83 yesterday.
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