9/17/2012

SanDisk: UBS Upgrades

SanDisk (SNDK) shares are trading higher in the early going Monday after UBS analyst Uche Orji upped his rating on the flash memory chip company to Buy from Neutral, with a new price target of $55, up from $46.

Orji writes that expected strong second half demand and new mobile phone design wins outweigh the risks in the stock. He projects “better than expected ASP trends” to continue in the second half on tight market supply. And he sees potential royalty upside from its deal with Samsung for NAND memory chip royalties.

Meanwhile, he contends that risks of market over supply and increased industry capital spending “remain in check,” thanks to the emergence of the tablet computer category and increased penetration of smart phones.

For 2010, he now expects EPS of $3.46, up from $3.28; for 2011, he goes to $3.77, from $3.

SNDK this morning is up $1, or 2.4%, to $43.90.

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