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Bank of America says there’s still more upside to come for this memory stock
Published
4 months agoon
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Bank of America sees a bright future ahead for Sandisk . The bank maintained its buy rating on the flash memory products manufacturer and hiked its price target to $230 per share from $125. This updated forecast implies a roughly 18% upside from where shares of Sandisk closed on Tuesday. Sandisk was spun off from Western Digital on Feb. 24 and listed on the Nasdaq at $36 per share. The stock has popped 440% since then. SNDK YTD mountain SNDK YTD chart Despite this rally, Bank of America analyst Wamsi Mohan thinks that Sandisk’s valuation still looks fair at its current levels. “We expect the price to BV multiple to rerate from 0.8x-2x to 3x-4x for the next few years on higher revenue growth with all-time high profitability levels,” he wrote. “We believe SNDK shares will rerate to at least 3-4x book value given a very strong memory cycle.” Mohan highlighted demand from data centers coming in higher than previously expected. This is beginning to meaningfully impact pricing, the analyst wrote. At the same time, expected medium-term undersupply of hard disk drives is driving higher demand for enhanced solid-state drives, Mohan wrote. The analyst also highlighted his increased confidence in Sandisk’s growing penetration of said enhanced solid-state drive market. “We model sustained double-digit Cloud end-market bit growth (unchanged) in C26 & C27 & expect SNDK to gain market share,” he wrote. “Given the near-term NAND pricing trends we do expect meaningful near-term beats in revenue, gross margins, & EPS but expect larger magnitude changes after 2H2026 when BiCS8 based eSSDs start to take share for SNDK.”
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