Zacks Investment Research downgraded shares of SanDisk Corp. (SNDK) from OUTPERFORM to NEUTRAL on July 12, 2013, with a target price of $64.00.
SanDisk is one of the key players in the NAND flash market. The company posted encouraging first-quarter results with both its top and bottom lines surpassing the Zacks Consensus Estimate. Revenues from OEMs and Retail were strong, aided by higher mobile embedded and SSD sales. Fiscal 2013 guidance was encouraging too. Growing interest in smartphones and tablets has boosted demand for NAND products. But restricted capacity additions have put a lid on supply, resulting in a better pricing environment. Transition to low-cost 3D NAND, growing exposure into enterprise SSDs, reduced focus on the PC-based consumer market and improving NAND supply/demand metrics are positive. But growing competition in the SSD space, typical cyclicality of the memory market and customer concentration risks are worrying. We downgrade the stock to Neutral from Outperform.
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