Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Deutsche Says Hold, Ups Target To $55
http://goo.gl/ryYDx


Deutsche Bank analyst Bob Gujavarty this morning cut his rating on shares of SanDisk (SNDK) to Hold from Buy, despite what may be another “solid” year for the NAND flash memory chip market.

SanDisk is highly correlated to prices in NAND flash, and although demand continues to grow, Gujavarty is concerned new manufacturing supply coming on in the second half of this year may bring down prices “sharply,” assuming demand proves less elastic than people think.

However, Guavarty is not changing estimates at this time: he’s modeling $4.9 billion in revenue and $3.85 per share in earnings this year. He also raised his price target to $55 form $50, to reflect a multiple of enterprise value times sales this year of 2 times, which he thinks is appropriate because even if gross profit margin narrows, it probably won’t reach a trough level, so there’s not as much downside.

The SNDK piece was part of an overall downgrade of the chip industry by Gujavarty and his colleague, Ross Seymore — about that, more in a moment.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement