Piper Jaffray Keeps 'Overweight' on Sandisk (SNDK) Despite Weak Numbers; Est., PT Lowered
Piper Jaffray analyst Ruben Roy lowered estimates and his price target on SanDisk (NASDAQ: SNDK) to $74.00 (from $82.00) following weak results but maintained an Overweight rating.
Roy commented, "We remain OW rated on SNDK as we believe reset expectations likely limit downside in the stock. Nevertheless, we concede that over the near-term (3-6 months) stock upside may be limited until we get confirmation that 2H15 recovery is on track. Following a negative pre-announcement, SNDK provided lower than expected 2Q15 guidance ($1.15-$1.25b in revenue; cons. $1.4b) and FY15 guidance of $5.4-$5.7b (previously $6.5-$6.8b) citing multiple factors (see 1st bullet below). We believe that 2Q15, likely represents a trough with recovery beginning in 2H15. We believe that SNDK specific setbacks are not reflective of market dynamics and we expect strong NAND demand, coupled with SNDK cost-downs from increasing mix of X3, 1Z and eventually 3D NAND along growing demand for Enterprise SSD to benefit the company from 2H."
The firm cut FY 2015 EPS from $4.53 to $2.78 and FY 2016 EPS from $5.50 to $4.27.
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Shares of SanDisk closed at $71.12 yesterday.