Analysts Simon Dong-je Woo and Jennifer Kim downgraded the NAND memory producer to "underperform" from "neutral." The analysts also lowered their price target to $65 from $75.
The analysts cited "worse-than-expected momentum" in the NAND market as a contributing factor to the downgrade. SanDisk faces increased competition from other NAND producers such as Samsung, Hynix, and Micron (MU). Prices of the chips may soon fall as high supply meets weaker demand, according to the analysts.
The analysts also lowered their estimated EPS for SanDisk. Woo and Kim now expect earnings of $4.53 a share in 2014, down from the previous estimated earnings of $7.01 a share for the year. They analysts also cut the EPS estimate for 2015 to $4.46 from $7.60. SanDisk is set to report fourth-quarter earnings Wednesday.
TheStreet Ratings team rates SanDisk as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SANDISK CORP (SNDK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."