SanDisk (SNDK) Remains Neutral Rated at Goldman Sachs Despite Strong Q1 Report

Goldman Sachs maintained a Neutral rating on SanDisk (NASDAQ: SNDK) with a price target of $80.00. 2014 EPS estimates were raised to 2014E EPS to $5.55 from $5.50 on
higher margins. Analyst Mark Delaney noted improved margin but continues to have NAND supply/demand concerns.

"Positively, we believe that SanDisk executed very well with gross margins up despite excess supply in some areas of the market and seasonally lower sales. We believe that SanDisk continues to benefit from mix, a weaker yen and an ability to use lower cost X3 in retail (albeit with some of the mix benefits in 1Q partly reversing in 2Q14E). However, while we believe SanDisk is executing well, it will likely be impacted to some extent by new industry supply growth, which we believe could cause challenging 2014 NAND industry supply/demand. Specifically, SanDisk announced it will fill the rest of Fab 5 part 1 by 3Q14 (adds less than 5% to its capacity), and its competitors have all recently converted DRAM to NAND or are planning to add capacity this year," said Delaney.

For an analyst ratings summary and ratings history on SanDisk click here. For more ratings news on SanDisk click here.

Shares of SanDisk closed at $75.85 yesterday.

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