SanDisk price target raised to $2,000 as Wedbush sees pricing upside

Wedbush Securities raised its price target on SanDisk (NASDAQ:SNDK) to $2,000 from $1,200, citing underestimated pricing gains ahead of the company's fiscal fourth-quarter 2026 report.

"The outlook implied only mid to high teens growth in average selling prices under our prior model, but conversations with industry contacts suggested pricing gains in the high double digits," Wedbush analysts said. The firm concluded SanDisk's initial guidance of $7.75 billion to $8.25 billion in sales and non-GAAP earnings per share of $30 to $33 underestimated the scale of pricing gains.

Wedbush's updated estimates assume blended bit average selling prices rise roughly 30% quarter over quarter, a figure the firm characterized as conservative given industry trends and SanDisk's pricing strategy. The company posted triple-digit sequential ASP growth in its fiscal third quarter. For the current September quarter, Wedbush expects pricing gains of more than 20%, with raw NAND prices climbing above $0.30 per gigabyte and enterprise SSDs commanding a further premium.

The firm raised its fiscal 2027 EPS estimate to $225.99 from $194.93 on projected revenue of $55.83 billion and gross margin of 84.7%. Wedbush expects earnings strength to continue through fiscal 2028, with limited new fab capacity coming online before late 2027 or 2028 and long-term supply and capacity agreements, referred to as SCAs, stabilizing pricing. The firm's model has earnings peaking in fiscal 2028 at approximately $264 per share.

Wedbush said it does not have a firm view on when NAND supply will normalize, citing its belief that supply currently runs well below true demand and that demand will keep accelerating through the end of the decade. The firm argued that long-term supply agreements should allow for a more gradual decline in margins and pricing once existing contracts expire, offering greater visibility into earnings and cash flow than memory vendors have historically provided.

The significant price target increase implies substantial upside from current levels. SanDisk shares rose 12% on Thursday afternoon. Investors will watch the company's fiscal Q4 2026 earnings report on Aug. 5 and its investor day on Aug. 13 for further updates on pricing, capacity, and long-term supply agreements.

This article is for informational purposes only and does not constitute investment advice.