Needham & Company Downgrades SanDisk (SNDK) to Hold on Negative Pre-Announcement

Needham & Company downgraded SanDisk (NASDAQ: SNDK) from Buy to Hold.

Analyst Rajvindra S. Gill comments, "SanDisk pre-announced lower than expected revenues and gross margins driven primarily by worse than expected sales of retail and iNAND products. We are particularly disappointed in the GM% performance, with 4Q14 levels now expected to be at their lowest since 1Q13. With SanDisk's growing CapEx and downward trending GM%, FCF may have peaked, which could limit capital return to shareholders in 2015 & 2016. Furthermore, we believe Samsung is at least one year ahead of SNDK in its progress toward 3D NAND, possibly altering its competitive position in the NAND market long-term. As we’ve stated in the past, we prefer DRAM fundamentals over NAND and favor MU over SNDK. We are trimming our estimates for 4Q14 and 2015, and lowering our rating to a Hold."

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 $97.04 yesterday.

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