SanDisk Separating Itself From Competitors, Morgan Stanley Says

On Thursday, Morgan Stanley raised the price target for SanDisk SNDK from $82 to $90 and maintained a Buy rating. The price target bump comes after the company reported huge first quarter earnings per share and revenue beats. SanDisk also reaffirmed 2014 sales guidance and boosted gross margin guidance from 45-48 percent to 47-49 percent. Analyst Joseph Moore believes SanDisk is “separating itself further from the pack” as several competitors have much lower margins and limited profits in NAND. “SNDK price declines of 7% y/y in 1Q compare to the industry down between 23% (per SIA) and 40% (per DRAMexchange),” according to the analyst. The higher profits are a result of “the company's high product quality, product advantages in every subsegment, slow supply growth/selective targeting, and the decision and capability to pursue further shrinks of planar vs 3D.” The stock is up 6.8 percent to $81. The $90 price target represents 11 percent upside from current levels.