UPDATE: Goldman Sachs Reiterates Buy Rating, Raises PT on SanDisk Corporation

In a report published Monday, Goldman Sachs Group reiterated its Buy rating on SanDisk Corporation SNDK, and raised its price target from $45.00 to $52.00. Goldman Sachs noted, “NAND contract pricing, which stabilized in early July, began to increase at the end of the third quarter (consistent with our expectations for tightening industry supply/demand through the end of 2012), leading to a significant recovery in SanDisk's stock since late June. At the same time, we have received many questions from investors regarding the sustainability of NAND fundamentals past the end of 2012. Based on our scenario analysis, we conclude that NAND supply/demand is likely to remain relatively tight through 1H2013, based on the following factors. (1) Following recent supply cuts and pushouts by most suppliers, we do not expect capacity additions from major NAND vendors through mid-2013, as margin levels remain depressed across the industry despite improving pricing. (2) We see only a modest likelihood of significant wafer supply additions even after mid-2013, as bit growth provided by process shrinks alone nearly matches our long-term view of demand growth. (3) We see potential upside to industry demand in 2013 if client SSDs using 3-bit per cell NAND (such as the recently introduced Samsung 840) become mainstream.” SanDisk Corporation closed on Friday at $44.09.