Auriga Maintains a 'Hold' on Suntech Power (STP); Survival Economics at Play
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Price: $0.53 --0%
Rating Summary:
1 Buy, 8 Hold, 12 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
1 Buy, 8 Hold, 12 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Auriga maintains a 'Hold' on Suntech Power (NYSE: STP) price target of $3.00.
Analyst, Hari Chandra, said, "The imposition of import tariffs with 90-day retroactivity (2.9% countervailing duties and 31.22% anti-dumping duties for Suntech Power) had an immediate impact on Suntech's 1Q12 results: $0.05 cost/Wp drag, 4.7% GM hit, and an $0.11 hit to EPS. But Suntech Power does not expect AD/CVD impact to be a factor going forward because of its global sourcing advantage (Taiwan cells/U.S. modules mfg.). However, we expect industry policy shifts and excess capacity will steadily chip off Suntech's ASP premium ($1.12/Wp vs. Trina Solar at $0.92/Wp) with ASP likely exiting 2012 at < $0.90/Wp vs. Trina Solar at $0.75/Wp."
"Even with cost gains, we reckon Suntech Power (along with other c-Si players) is unlikely to turn a profit before 2014 given continued ASP erosion and cost catch up. With survival economics at play in solar PV, we value STP at 1x 2013 TBV (net of write-offs) for a $3PT."
For an analyst ratings summary and ratings history on Suntech Power click here. For more ratings news on Suntech Power click here.
Shares of Suntech Power closed at $2.02 yesterday.
Analyst, Hari Chandra, said, "The imposition of import tariffs with 90-day retroactivity (2.9% countervailing duties and 31.22% anti-dumping duties for Suntech Power) had an immediate impact on Suntech's 1Q12 results: $0.05 cost/Wp drag, 4.7% GM hit, and an $0.11 hit to EPS. But Suntech Power does not expect AD/CVD impact to be a factor going forward because of its global sourcing advantage (Taiwan cells/U.S. modules mfg.). However, we expect industry policy shifts and excess capacity will steadily chip off Suntech's ASP premium ($1.12/Wp vs. Trina Solar at $0.92/Wp) with ASP likely exiting 2012 at < $0.90/Wp vs. Trina Solar at $0.75/Wp."
"Even with cost gains, we reckon Suntech Power (along with other c-Si players) is unlikely to turn a profit before 2014 given continued ASP erosion and cost catch up. With survival economics at play in solar PV, we value STP at 1x 2013 TBV (net of write-offs) for a $3PT."
For an analyst ratings summary and ratings history on Suntech Power click here. For more ratings news on Suntech Power click here.
Shares of Suntech Power closed at $2.02 yesterday.
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