SanDisk stock initiated with Buy rating at BofA on memory pricing outlook

BofA Securities initiated coverage on SanDisk (NASDAQ:SNDK) Wednesday with a Buy rating and a price target of $61.00, citing favorable supply-demand dynamics in the memory market. The stock, currently trading at $44.09 with a market capitalization of $6.4 billion, has seen its shares rise over 22% in the past six months.

The firm identified SanDisk as a leading developer and manufacturer of data storage devices based on NAND flash technology, positioning the company to benefit from improving memory pricing conditions. With trailing twelve-month revenue of $7.2 billion and a healthy gross profit margin of 32.58%, SanDisk maintains a strong market presence.

BofA’s analysis points to potential margin expansion for SanDisk given the current pricing trajectory and operating leverage opportunities. The firm also highlighted the company’s "better through-cycle economics" resulting from its diversified end markets compared to industry peers. InvestingPro analysis shows the company maintains a solid financial position with a current ratio of 3.7, indicating strong liquidity management.

The joint venture structure of SanDisk creates what BofA described as a "unique shared capex profile," providing additional advantages in the competitive memory market landscape.

BofA’s price objective of $61 is based on discounted cash flow analysis and a price-to-book ratio of approximately 1x for calendar year 2026 estimates, representing a potential 38% upside from current trading levels.

In other recent news, SanDisk Corporation reported a revenue of $1,695 million for the third quarter of 2025, reflecting a 10% sequential decline and a 1% decrease compared to the same period last year. The company also posted a non-GAAP loss of $0.30 per share. Despite these financial challenges, SanDisk has increased its cash reserves and revised its guidance for future quarters, forecasting revenue between $1,750 million and $1,850 million for the fourth quarter of 2025. Additionally, SanDisk has upsized its secondary public offering to 18,534,581 shares, an increase from the initially proposed 17 million shares, with shares priced at $38.50 each. These shares, currently held by Western Digital Corporation (NASDAQ:WDC), are expected to be part of a debt-for-equity exchange with affiliates of J.P. Morgan Securities LLC and BofA Securities. Moreover, J.P. Morgan Securities LLC and BofA Securities are acting as joint lead book-runners for this offering. The offering includes a greenshoe option for underwriters to purchase an additional 2,780,187 shares. These recent developments highlight SanDisk’s strategic financial maneuvers amidst its ongoing market challenges.

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