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SanDisk: Morgan Issues “Tactical” Buy; Says Selling Overdone

SanDisk (SNDK) shares are getting a modest lift this morning from Morgan Stanley analyst Atif Malik, who both repeated his Overweight rating on the shares, and issued a brief “tactical” research idea note asserting that the memory chip company’s stock is likely to rally over the next 30 days.

Malik notes that the stock has traded off 15% recently, “making short term valuation much more compelling.” He contends the stock is oversold, and that risk-reward looks attractive.

Malik contends that smart phone makers are planning to increase NAND purchases in early July after a seasonally slow June; he also notes that Samsung’s decision to make its facility in Austin a logic rather than NAND fab caps supply. He notes that the stock has dropped to under 10x his 2011 EPS estimates, versus a historical average of 15x-25X.
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