UPDATE: BMO Capital Markets Initiates Coverage on SanDisk Corporation with Market Perform Rating, $59 PT on Current Valuation

In a report published Friday, BMO Capital Markets analyst Ambrish Srivastava initiated coverage on SanDisk Corporation (NASDAQ: SNDK) with a Market Perform rating and $59.00 price target.In the report, Srivastava noted, “Well, actually we do not quite buy that the industry is so different this time around. We do not believe that the NAND flash players will continue to play nice forever and that the industry will remain in this happy supply-demand equilibrium that it appears to be in for the time being. Scaling, as defined by Moore's Law, is slowing down, which will lead to nodes being extended out and to slower technology transitions. In a commodity industry, we believe it could potentially be detrimental to a technology leader such as SanDisk because it will allow others to compete for the profit pool earlier than in the past. News flow has been positive for the NAND industry for quite some time, and near term, we do not see any smoking guns regarding unplanned capacity or node transitions being accelerated. However, we would not be chasing the stock here, even though we see estimates being revised higher. We believe that on a P/B and EV/sales basis, valuation reflects the current state of affairs. On both metrics, the current valuation is well above the respective five-year median, and approaching the high end of the respective range.”SanDisk Corporation closed on Thursday at $58.62.