SanDisk Price Target Gutted: Jefferies Slashes $1,250 Off On Margin Fears

On Thursday, Jefferies analyst Blayne Curtis cut his price target on SanDisk Corp. (NASDAQ: SNDK ) to $1,750 from $3,000, a reduction of $1,250, while maintaining a Buy rating.

SNDK stock is down after earnings.

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The cut followed fiscal fourth-quarter results in which SanDisk posted substantial upside for the quarter, but September-quarter guidance disappointed on several fronts that Jefferies flagged as central to the reset.

NAND Pricing Moderating NAND pricing sits at the core of the downgrade.

SanDisk guided to only modest average selling price gains for the September quarter, a slowdown that Jefferies and peers view as a meaningful deceleration from the pricing surges that fueled the stock’s rally over the past year.

Wedbush analyst Matt Bryson, working from similar data, noted long-term and supply-commitment agreements cover only about half of SanDisk’s bits, while uncontracted NAND parts are seeing price increases above 20% — a gap that has fed skepticism about how conservative the company’s own guidance really is.

Read Also: Sandisk Stock Slides Despite Q4 Earnings Beat — Details Lower Margin Guidance Lower gross-margin guidance compounded the concern.

Management guided to essentially stable margins for the September quarter rather than the continued expansion investors had priced in, even though the 83% to 85% range still landed ahead of Street consensus.

Jefferies’ target cut reflects a view that the combination of cooling ASP momentum and flattening margins signals the NAND pricing cycle may be losing the steam that drove SanDisk’s roughly 3,000% run over the past year, according to CNBC.

Other Analysts Other desks moved in narrower steps.

Morgan Stanley’s Joseph Moore held an Overweight rating with a matching $1,750 target, and Evercore’s Amit Daryanani trimmed his target to $2,800 from $3,100 while keeping Outperform, arguing five new supply agreements provide stronger multiyear visibility.

Wedbush kept a $2,000 target and an Outperform rating, betting the NAND supply gap won’t close before 2028.

Evercore views SanDisk’s upcoming analyst day as the next catalyst for detail on capital allocation and the High Bandwidth Flash opportunity.

SNDK Stock Price Activity: SanDisk stock was down 7.18% at $1253.58 at the time of publication Thursday, according to data Pro.

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