This Analyst Just Cut Its Price Target on SNDK Stock. Here's Why.

SanDisk (SNDK) stock is in focus on July 23 after a senior Susquehanna analyst trimmed his price target on the flash memory products specialist. In a research note today, analyst Mehdi Hosseini set a downwardly revised $3,050 price target on SNDK, which nonetheless signals potential upside of an exciting 80% from current levels. 

SanDisk shares have pulled back sharply in recent weeks amid a broader tech rout. At the time of writing, they’re down nearly 30% versus their June high. 

Why Susquehanna Trimmed Its Price Target on SNDK Stock

According to Hosseini, the reduced price objective reflects updated internal estimates following a correction to the firm’s financial model, which previously incorporated inaccurate sales and earnings per share (EPS) estimates.

Moreover, the memory architecture for artificial intelligence (AI) inferencing applications remains “somewhat unsettled.”

Specifically, the Susquehanna analyst pointed to uncertainty surrounding how inferencing memory hierarchies would split workloads between DRAM and local SSDs. 

If AI firms aggressively adopt KV cache offloading, enterprise SSD demand would increase rather significantly. Conversely, if they continue relying mostly on DRAM/HBM, demand for SanDisk’s flagship product will be lower. 

Why Mehdi Hosseini Is Still Bullish on SanDisk Shares

Despite lowering the price target, Susquehanna remains strongly bullish on SanDisk shares' longer-term trajectory. 

According to Barchart, the company is expected to report more than $33 per share of earnings (EPS) for its current financial quarter on Aug. 5. This would represent a staggering 167x growth on a year-over-year basis. 

In his report, Hosseini highlighted key structural catalysts for his constructive view, including the ramp-up of BiCS8 and BiCS10 NAND technologies, which are expected to drive about 10% annual front-end cost-per-bit reductions.

Finally, the analyst is positive on SNDK’s long-term contractual agreements with hyperscalers as they offer significant visibility into future revenue. 

What’s the Consensus Rating on SanDisk?

While not nearly as bullish as Susquehanna, other Wall Street firms also recommend sticking with SNDK stock for the long term. 

According to Barchart, the consensus rating on SanDisk currently sits at “Strong Buy,” with the mean price target of about $2,368 indicating potential upside of more than 40% over the next 12 months.