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Auriga Upgrades Suntech Power (STP) to Buy; Better Days Ahead

December 2, 2010 7:15 AM EST Send to a Friend
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Price: $0.53 --0%

Rating Summary:
    1 Buy, 11 Hold, 16 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 14 | New: 52
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Last night, Auriga upgraded Suntech Power (NYSE: STP) from Hold to Buy. PT upped from $9 to $11.

Auriga analyst says, "Ahead of the Dec 6 Analyst Day and after the Glory Silicon acquisition announcement, we adjust our model only for the expected margin increase from in-house wafering -- and find potential to reach ~22% gross margin in 2011 vs. 4Q guidance of 17% and 2011 Consensus of ~18%. Gross margin of ~20% is also the norm around which STP operated in years past. We model 25% internal wafering capabilities in 2011 to discount recent missteps in execution. Further upside from increased sales, increased wafer capacity, and the final transition to Pluto is possible, but we leave that discussion for after the analyst day. With the stock in the vicinity of ~$7 tangible book value, we see limited downside from these levels."

For more ratings news on Suntech Power click here and for the rating history of Suntech Power click here.

Shares of Suntech Power closed at $7.34 yesterday.




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