Cowen Raises Estimates on Suntech (STP)
August 21, 2008 2:41 PM EDT
Cowen & Company is out with a research note this morning raising its estimates on Suntech Power Holdings (NYSE: STP) following yesterday's strong Q2 results. The firm maintains its Outperform rating on the stock.
According to the firm, Suntech's "long-term contract material provides great visibility on cost reduction." Cowen sees shares of Suntech trading about 50%+ higher over the next 12 months.
Cowen raised its FY08 sales estimate from $1.99 billion to $2.155 billion and its EPS estimate from $1.55 to $1.62. These numbers compare to the Street estimates of $2.06 billion in revs and $1.58 in EPS. The firm also raised its shipment level from 520MW to 550Mw. During Q3, Cowen sees a gross margin decline of 160 basis points on a quarter-over-quarter basis, which reflects a weaker Euro/Dollar.
For FY09, the firm raised its sales estimate from $3.1 billion to $3.335 billion and EPS from $2.52 to $2.65, versus the Street's estimates of $3.06 billion and $2.55, respectively. Cowen sees a module average selling price of $3.40 and is modeling for a 100 basis point increase in gross margins (to 23.8%).
Suntech Power Holdings Co., Ltd. designs, develops, manufactures, and markets various photovoltaic (PV) cells and modules to provide electric power for residential, commercial, industrial, and public utility applications worldwide. |
