Goldman Sachs Drops SanDisk From Its Conviction Buy List

Goldman Sachs removed SanDisk Corporation

from its Conviction Buy List Thursday following the company's pre-announcement of a weak Q1. The move comes after analysts, led by Mark Delaney, moved the company to its Conviction Buy List on March 10 due to "increased confidence in 2015 supply/demand, gross margin expansion, and attractive valuation." In Thursday's analyst note, Delaney commented that the "positive call has clearly been wrong and the timing was particularly poor." "SanDisk negatively revised guidance for the second straight quarter, again due in part to company specific issues. We believe execution will need to improve for several quarters in order for the multiple to re-expand," according to Delaney. Despite the stock's performance, the firm maintained a Buy rating as the analysts felt the "valuation is attractive" and expressed the belief "that the NAND industry offers above average long-term growth potential vs. the rest of semis." The price target was cut from $106 to $84 after reducing 2015 EPS estimates from $5.00 to $3.85 and 2016 EPS estimates from $6.35 to $5.30. Delaney concluded that since the "company has key product ramps ahead," including 3D NAND in 2H15 and 2016, "the recent execution issues will likely weigh on the stock for some time." SanDisk Corporation recently traded at $66.32, down 18.29 percent.