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Goldman Sachs Upgrades SanDisk (SNDK) to Buy On Supply Pushouts

June 25, 2012 7:12 AM EDT Send to a Friend
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Price: $82.99 +9.41%

Rating Summary:
    18 Buy, 11 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Goldman Sachs upgraded SanDisk (NASDAQ: SNDK) from Neutral to Buy with a price target of $45, suggesting 24% upside.

The firm sees an attractive entry point as supply pushouts should drive margins and stock higher.

For their upgrade, the firm cited: "(1) Post NAND industry oversupply and price pressure through 3Q12, we expect a return to supply/demand balance by 4Q12 as we believe suppliers such as Samsung and Hynix are pushing out capacity expansion and shifting some NAND capacity to logic; (2) We expect modest gross margin expansion for SanDisk in 2H12 given tighter supply dynamics; (3) Long term, we see outsized SSD exposure for SanDisk relative to peers; (4) Valuation has become compelling with the stock trading at just 5X 2013E product earnings (given $15 in net cash/share plus $12 in royalty value)."

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 $36.36 yesterday.




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