SanDisk Stock Jumps On Memory Patent Licensing Deal

SanDisk (SNDK) Tuesday night announced that it had reached a Flash memory patent cross-licensing deal with Korean chipmaker Hynix. The companies also said they agreed to form a joint venture to “manufacture memory components and sell NAND memory systems solutions.”

In a research note yesterday, Gurinder Kalra of Bear Stearns wrote that he expects the deal to result in “material upside” to earnings estimates. Kalra estimates that royalties from Hynix should add 10 cents a share to 2007 EPS, and 24 cents in 2008.

Kalra reiterated his Outperform rating and $55 price target on the stock.

SanDisk yesterday was up $1.34 at $43.25.

Yesterday: SanDisk: CIBC Upgrades; Sees Firming NAND Prices, New Licensing Prospects