SanDisk has ‘game-changing product’ now in testing, RBC says
Data storage chip maker SanDisk (SNDK) has a “game-changing product” on the horizon that prompted RBC Capital Markets analyst Doug Freedman on Friday to issue a bullish report and hike his price target on the stock. Freedman reiterated his outperform rating on SanDisk stock and raised his price target to 100 from 84. SanDisk stock rose 2.7% on Friday to close at 80.61. SanDisk stock touched a 14-year high of 82.55 on March 21. “While still uber nascent, as end-customers have yet to ship ULLtraDIMM systems with qualifications taking place, we are early believers that SanDisk (SNDK) (in partnership with Diablo Technologies) has a game-changing product for the enterprise market that should prove to be immediately disruptive,” Freedman wrote. The ULLtraDIMM business opportunity is currently “flying under the radar,” he said. It could deliver an incremental $2 billion in sales and $1.15 in earnings per share in 2015 and $4.4 billion in sales and $3 EPS in 2016, he said. SanDisk had 2013 revenue of $6.17 billion, up 22%. “In addition, ULLtraDIMM plays into our thesis that NAND (flash memory) is moving up the value chain into high-value applications,” Freedman wrote. “As a result, we expect SanDisk to exhibit potentially stronger than expected average selling prices due to mix-shift.”