07:13 SNDK SanDisk initiation details (59.72 )
JMP Securities initiates SNDK with a Market Underperform and $38 tgt based on valuation their belief that SNDK is ultimately a cyclical memory semiconductor co.. The firm lists the following reasons: 1) the co, trading at 27.8x CY06 earnings, is overvalued for a cyclical memory company; 2) growing competition from large players such as Samsung, Intel, Micron, ST Micro, Spansion, and emerging China/Taiwan players could commoditize the NAND flash market; 3) historically, the vertical integration model practiced by SanDisk of making, branding, and selling chips, memory modules, and systems such as MP3 music players has never worked within the semiconductor industry; 4) the firm expects a pause in NAND flash memory demand in 1H06 as the industry makes a transition from the relatively mature digital camera and MP3 music market to music equipped cell phones |
