Morgan Stanley Keeps Overweight on Sandisk, $1,100 Price Target

Morgan Stanley analyst Joseph Moore reiterated an Overweight rating and $1,100 price target on SanDisk (NASDAQ: SNDK)

“We have made the argument that near term numbers are discounted, and the key here is durability – and we see the after hours sell off as evidence of that. It has been obvious that near term numbers will be good. Before we find fault that they guided below some buy side commentary, we should see where the quarter actually lands, given the substantial upside of the last two quarters.

The durability debate is harder to win, definitively, in any one earnings call. But datacenter up more than 3x q/q, only modest increases in capex, and over $40 bn in RPO certainly point in that direction. While we will continue to work hard to get anecdotal proof points, our reading of the tea leaves is that memory is likely to remain very tight as long as AI remains strong – and not just tight, we think that memory will remain a constraint to capex.

Management’s view that this is no longer cyclical is not something that we underwrite – we continue to value on through cycle earnings, to their modest consternation – but we appreciate the effort, and if this does prove durable could pay off in a multiple on peak whether we agree with that or not.

We aren’t surprised at the selloff, but we would be buyers on weakness as we do expect these types of numbers to be sustainable for longer than overall expectations”

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