Citigroup says mid-qtr check on Sandisk (NASDAQ:SNDK) fundamentals suggests positive EPS revision pressure is forming, in line w/seasonal norms which in yrs past have been '+' for the stock. Demand risks exist (handset), though CIR thinks rising contract pricing from June to October is a reasonable outlook. SNDK is Citi's mid-cap top pick on contract pricing and EPS revision catalysts.
Since 2003 Street EPS have jumped 22% and 43% in 2Q and 3Q, respectively (shares by 18% and 34%). Firm recalls that contract pricing risks shift to the upside from May to September (back to school and pre-holiday demand), though broader chip industry orders are most benign from June to August. NAND's comparative seasonal strength should augur well for SNDK shares if fundamental and estimate trends emerge in 2Q08/3Q08 as they think possible.
Reits Buy.
Notablecalls: Worth maybe 1pt upside here.
