Q4 Preview: Market Leader SanDisk (SNDK) Could Be Tested This Year

Shares of SanDisk Corporation (Nasdaq: SNDK) are trading up more than 1 percent Wednesday ahead of the release of its fourth-quarter results after the closing bell.

The Wall Street quarterly consensus for SanDisk Corp. is $1.26 per share in earnings on $1.57 billion in sales. During the fourth quarter of last year, the company reported earnings of $1.27 per share on $1.33 billion in total sales.

For the full year 2011, analysts on the Street are currently estimating $4.59 per share in earnings on $5.66 billion in total sales.

The fourth quarter conference call is scheduled for 5:00 pm ET. Dial-in: 719-457-1036; Passcode: 5300014.

According to data from Bloomberg, shares of SanDisk Corp. have 19 Buy ratings, five Hold ratings and one Sell ratings. The average price target on shares of SNDK is $60 with a range from $37 to $75.

Analyst Comments:

• Wedbush is bullish on the quarter and year. For the quarter, the firm forecasts earnings of $1.30 per share on $1.615 billion in sales, up from previous estimates of $1.22 per share on $1.595 billion in sales. Wedbush noted the upside will be driven by favorable NAND pricing, which should continue through the first quarter of fiscal 2012.
  
  An analyst at Wedbush commented, “Although we forecast a more benign NAND flash pricing environment of -15+% Q/Q per gigabyte vs. 20+%, we still forecast a typical seasonal drop in demand. We think that Q1 Street estimates for SanDisk’s revenue to decline -7% Q/Q growth might prove to be a little too optimistic versus our expectations for SanDisk to guide Q1 revenue to decline in a range of -8% to -12% Q/Q.”
  
  Wedbush reaffirmed a Neutral rating and recently raised its price target from $45 to $51.
  
  
• Deutsche Bank’s estimates for the quarter are below the Street’s estimates at $1.53 billion in sales and earnings of $1.19 per share. The firm said there may be some upside to its earnings estimate, but doesn’t see the company's results trumping the Street’s consensus.
  
  The firm anticipates the NAND market will remain in supply & demand balance through early 2012, but expects growth to moderate sharply in 2H12 as competitors with DRAM exposure face liquidity challenges. “We expect SNDK's 1Q12 revenue would be up +12% y/y while EPS should grow +9% y/y. SNDK's organic growth far surpasses the rest of the semiconductor stocks in our coverage universe. NAND flash is likely to outperform the semiconductor industry again in 2012 and SNDK remains a segment leader.”
  
  Deutsche Bank reiterated a Buy rating and $55 price target on the company ahead of the release.

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