Wedbush Slashes Price Target for SanDisk Corporation Amid Q1 Negative Pre-Announcement


In a research report issued today, Wedbush analyst Betsy Van Hees maintained a Neutral rating on SanDisk Corporation (NASDAQ:SNDK) and reduced the price target to $56 (from $67), which implies a downside of 15% from Thursday’s close of $65.61. The decreased price target comes after the company cut its first fiscal quarter revenue forecast.

Van Hees noted, “SNDK’s reasons for the drop in Q1 revenue to $1.3B (-25% Q/Q) down from prior guide of $1.4B to $1.5B (-19% to -16% Q/Q) due to lower-than-expected sales of enterprise SSDs and lower pricing is reasonable given the lumpy nature of enterprise and challenging flash memory card and client SSD pricing environment. However, what’s new and very concerning is 1) commentary on certain product qualification delays given 15nm started ramping in 2H:14 and 1Y (2nd gen 19nm) has been in mass production since 1H:14 and 2) Analyst Day scheduled for May 13 has now gone to “schedule TBD”. We believe the Analyst Day was SNDK’s platform/opportunity to address investors’ multiple concerns on supply/demand, pricing/cost-downs, product road map, and financial metrics.”

Bottom line, “The concerns from our downgrade on Jan 22 have increased as we are now worried that qual delays could accelerate share losses and more muted cost-downs from share losses, lumpy enterprise, and continued price pressure could drive another hefty cut to the Street and our lower estimates.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Betsy Van Hees has a total average return of 18.5% and a 60.0% success rate. Hees has a 0.4% average return when recommending SNDK, and is ranked #234 out of 3550 analysts.

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