Four Reasons To Buy SanDisk Now

Citigroup’s Craig Ellis yesterday morning raised his rating on SanDisk (SNDK) to Buy from Hold, asserting that there could be an “under supply” of NAND flash memory chips in the second half. Ellis raised his price target on the stock to $52 from $44.

Ellis offered four reasons to buy the stock now:

Stock has under-performed the SOX by 6% year-to-date and 8% quarter-to-date.

SNDK shares within 18% of 12 month lows ahead of “seasonally advantaged” third quarter, in which he says the shares have advanced 40%-plus in recent years.

Firming fundamentals, with NAND contract rates up about 35% from late February.

Increased EPS estimates for higher royalties and lower expenses.

He raised his 2007 EPS estimate to $1.23 a share from $1.04; for 2008 he goes to $2.32 from $2.04.

SanDisk yesterday was up 83 cents at $42.69.

SNDK 1-yr chart: