While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of SanDisk Corporation (NASDAQ: SNDK) gained 1% today after ISI Group upgraded the data storage technologist from neutral to strong buy.
So what: Along with the two-notch upgrade, analyst C. J. Muse boosted his price target to $110 (from $87), representing about 28% worth of upside to Friday's close. So while contrarian traders might be turned off by SanDisk's price strength over the past year, Muse's call could reflect a growing sense on Wall Street that its prospects still aren't fully baked into the valuation.
Now what: According to ISI, SanDisk's risk/reward trade-off remains attractive at this point. Specifically, Muse noted that the management is on a "clear path" to cost improvements on planar NAND and that it is in a particularly strong position to take advantage of growing enterprise storage demand. Of course, with the stock now up about 65% from its 52-week lows and trading at a near-20 P/E, I'd wait for some of the excitement to fade before buying into that bullishness.