Auriga continues their love affair with the solar sector, this time commenting on Suntech Power (NYSE:STP), which they see generating gross margins of over 20 percent into 2012.
The full year 2012 EPS estimate of Suntech of $1.63 is based on the expected 25 percent growth in shipments versus a 12 percent decline in ASP.
They also see wafer capacity surging to 50 percent of the projected 3.1GW of cell/module capacity.
Concerning the cost of polysilicon, they see that dropping from $52/kg in 2011 to $45/kg in 2012.
Auriga reiterates a "Buy" rating on Suntech Power, which closed Tuesday at $9.00, gaining $0.25, or 2.86 percent. Auriga has a price target of $13 on Suntech, raising it from $12.
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