SanDisk: Getting Bullish on Flash Memory

| About: Western Digital (WDC)

SanDisk (SNDK) shares are getting a lift Monday morning from Thomas Weisel Partners analyst Kevin Cassidy, who raised his rating on the stock to Overweight from Market Weight.

“We believe SanDisk entered a favorable part of its cycle,” he writes in a research note. He says manufacturing cost declines are accelerating. Cassidy also reports that the company could begin sourcing some NAND flash chips from Toshiba and Samsung starting in early 2010. The effect, he says will be to “reduce uncertainty and volatility for the company’s margins going forward.”

Cassidy expects NAND Flash demand to re-accelerate in the second half, “and possibly exceed supply,” based on “many new trends” happening faster than expected, including HD video capture, high flash capacity smart phones and SSDs.

Cassidy lifted his 2009 EPS estimate to a loss of 45 cents from a loss of 67 cents. For 2010, he now sees a profit of 27 cents, up from 12 cents. The Street is looking for a loss of 81 cents this year and a profit of 6 cents for next year.

SNDK Monday is up 41 cents, or 2.8%, to $14.88.

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