UPDATE: Morgan Stanley Reiterates SanDisk at Overweight and Raises PT to $60 on Tight DRAM Supply

Morgan Stanley analyst Joseph Moore published a report on SanDisk

that reiterated its Overweight rating and raised the price target from $55 to $60. Morgan Stanley reported that, “Despite pricing strength, wafer start growth and shrink activity remains remarkably slow. Several structural elements are leading to this slow supply growth environment, including distractions at most NAND producers dealing with foundry and DRAM, capital intensity issues driving more expensive shrinks, increasing demand for trailing edge technology within SSD applications, and looming technology barriers to NAND shrinks. We expect some moderate transition of supply from DRAM to NAND, and some new production additions to be announced in the coming quarters, but expect overall supply growth to remain sub 40% in 2013 and 45% in 2014, key to our bullish view.” Shares of SanDisk closed at $53.76 on Tuesday.