UPDATE: Goldman Sachs Upgrades SanDisk Corporation to Buy on Supply Push-Outs

Goldman Sachs raises its rating on SanDisk Corporation SNDK from Neutral to Buy and introduces a price target of $45. Goldman Sachs comments, "We are upgrading SanDisk to Buy as we see an attractive entry point for the stock: (1) Post NAND industry oversupply and price pressure through 3Q12, we expect a return to supply/demand balance by 4Q12 as we believe suppliers such as Samsung and Hynix are pushing out capacity expansion and shifting some NAND capacity to logic; (2) We expect modest gross margin expansion for SanDisk in 2H12 given tighter supply dynamics; (3) Long term, we see outsized SSD exposure for SanDisk relative to peers; (4) Valuation has become compelling with the stock trading at just 5X 2013E product earnings (given $15 in net cash/share plus $12 in royalty value)." SNDK closed at $36.36 on Friday.