Suntech Power's (NYSE:STP) Gross Margin Guidance for 2011

Suntech Power (NYSE:STP) said at its Analyst Day that their gross marging guidance for 2011 would be from 20 percent to 22 percent, most of that associated gains in costs.

Auriga commented, "In-line with our Analyst Day preview, Suntech introduced 2011 gross margin guidance of 20%-22% from cost gains associated with new in-house wafering. Further details within the rest of the business were provided, and we are adjusting our model accordingly. We again refine our valuation methodology by making the equity contribution of Global Solar Fund (GSF) zero in the "after tax" line, as we see the potential for volatility masking true underlying results. We increase our 2011 sales estimate to $3.55bln from $3.05bln and raise our EPS estimate to $1.48 versus our prior $1.42."

Auriga maintains a "Buy" rating on Suntech Power, which was trading at $9.02, down by $0.02, or 0.22 percent, as of 12:01 PM EST. They have a price target of $12 on the company, increasing it from $11.