Deutsche Bank Downgrades Suntech Power (STP) to Hold; Fairly Valued with Margin Likely to Disappoint

Deutsche Bank downgraded Suntech Power (NYSE: STP) from Buy to Hold.

Deutsche analyst says, "We expect Suntech’s gross margin to decline qoq to 15-16% in 2Q11E from 19% in 1Q11, below the company’s earlier guidance during 1Q results. Although the integration into wafer business starting 1Q11 is likely to benefit the company longer term, such benefit now looks limited in the near term as spot wafer ASP has dropped more than 25% since May 2011. Trading at 9x 2011E P/E, Suntech looks fairly valued and we downgrade the stock."

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 $7.41 yesterday.

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