Evercore ISI Initiates Sandisk at Outperform, $1,200 Price Target

Evercore ISI analyst Amit Daryanani initiates coverage on SanDisk (NASDAQ: SNDK) with an Outperform rating and a price target of $1,200.

“We are initiating coverage of Sandisk (SNDK) with an Outperform rating and $1,200 Target Price (though our BULL Case is Pegged at $2,600). We believe SNDK is levered to one of the most attractive areas of the AI infrastructure stack – data storage, where demand is accelerating and supply remains constrained at minimum through CY28 if not beyond.

While concerns around peak NAND pricing and cyclicality persist, we think the current cycle is structurally tighter and more durable, underpinned by AI-driven demand and sustained supply discipline that is creating “SCA’s”, providing memory providers with pricing floors and upfront cash payments (Strategic Contractual Agreements between cloud companies and NAND/DRAM providers).

Despite strong stock performance, we see further upside driven by earnings revisions, mix shift toward enterprise SSD, and multiple re-rating. Key points behind our bullish view – a) Room for sustained growth from ASP tailwinds given a more disciplined industry that is focused on supply-demand alignment and return optimization rather than pure bit growth, which should limit NT oversupply; b) Increased exposure to enterprise/cloud should drive a better growth vector and diversity.

Currently, data center customers account for <15% of total sales, though we expect growth here to accelerate; c) Room for sustained margin & FCF expansion as structural shifts in NAND supply-demand balance, customer type and strategic contracts should support higher through the cycle margins and cash flow generation. d) Capital allocation given recent balance sheet deleveraging, that has driven a net cash position, we expect SNDK to begin returning capital to shareholders (in form of buybacks).

Net/Net: We view SNDK as transitioning from a cyclical memory name to a structural AI beneficiary, with a favorable risk/reward. While we remain mindful of eventual NAND pricing normalization, we believe the current setup offers NT EPS upside + multiple expansion potential not fully reflected in valuation.

Initiating with an Outperform rating and $1,200 target, reflecting 12x our FY27 EPS estimate.”

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