Suntech Power's (NYSE:STP) Gross Margins Should Exceed 20 Percent into 2012

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.