Broadpoint AmTech Downgrades SanDisk (SNDK) to Neutral

Broadpoint AmTech downgrades SanDisk Corporation (Nasdaq: SNDK) from Buy to Neutral, saying near-term risk/reward is less favorable and recommend taking profits and moving to the sidelines.

The firm cited:

• Top-line weakness raises concerns about the demand environment and we believe partially reflects weaker consumer spending, and is not fully explained by the elasticity effect from higher pricing,
  
• While SanDisk could potentially see a strong 2H09 driven by a benign pricing environment and solid product cost reduction in 4Q, we do not see a catalyst in the near-term and believe NAND component pricing is biased to the downside given rising utilization at Toshiba/SNDK (80% in 2Q to 100% in 3Q) and the negative impact on flash card densities from recent price increases,
  
• We believe the supply-driven improvement in NAND fundamentals in 1H09 is now priced in. The stock has increased 135% since our December '08 upgrade and 42% in the past two weeks.

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