Goldman Sachs Boosts Target on SanDisk (SNDK), NAND Improvement to Last Through Mid-2013
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Price: $1,596.08 -0.28%
Rating Summary:
29 Buy, 18 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
29 Buy, 18 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Goldman Sachs boosted its six-month price target on Buy-rated SanDisk (NASDAQ: SNDK) from $45 to $52 saying the near-term NAND improvement will likely last through mid-2013.
After stabilizing in early July NAND pricing began to increase at the end of the third quarter, which has led to a sharp recovery in SanDisk's stock. While investors have questioned if this is sustainable beyond the end of the year, Goldman cites three reason why NAND supply/demand is likely to remain relatively tight through 1H2013:
(1) Following recent supply cuts and pushouts by most suppliers, we do not expect capacity additions from major NAND vendors through mid-2013, as margin levels remain depressed across the industry despite improving pricing. (2) We see only a modest likelihood of significant wafer supply additions even after mid-2013, as bit growth provided by process shrinks alone nearly matches our long-term view of demand growth. (3) We see potential upside to industry demand in 2013 if client SSDs using 3-bit per cell NAND (such as the recently introduced Samsung 840) become mainstream.
Goldman raised 2012/2013/2014 EPS to $1.85/$3.50/$4.50 from $1.75/$3.00/$4.00.
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 $44.09 yesterday.
After stabilizing in early July NAND pricing began to increase at the end of the third quarter, which has led to a sharp recovery in SanDisk's stock. While investors have questioned if this is sustainable beyond the end of the year, Goldman cites three reason why NAND supply/demand is likely to remain relatively tight through 1H2013:
(1) Following recent supply cuts and pushouts by most suppliers, we do not expect capacity additions from major NAND vendors through mid-2013, as margin levels remain depressed across the industry despite improving pricing. (2) We see only a modest likelihood of significant wafer supply additions even after mid-2013, as bit growth provided by process shrinks alone nearly matches our long-term view of demand growth. (3) We see potential upside to industry demand in 2013 if client SSDs using 3-bit per cell NAND (such as the recently introduced Samsung 840) become mainstream.
Goldman raised 2012/2013/2014 EPS to $1.85/$3.50/$4.50 from $1.75/$3.00/$4.00.
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 $44.09 yesterday.
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