UPDATE: Piper Jaffray Lowers PT on Hollysys Automation to $12.50 (HOLI)

Piper Jaffray is out with its report today on Hollysys Automation HOLI, lowering its PT from $18 to $12.50. In a note to clients, Piper Jaffray writes, "HOLI posted strong fiscal Q3 results, with revenue and net income both easily topping our expectations. Gross margin expanded nicely in the quarter (to 40.5%) due to the recognition of various high-margin rail and subway projects. However, we believe investor expectations were set exceptionally high after HOLI logged multiple contract wins in late CY10. Investors may have fallen into the trap of assuming such growth could continue; if so, HOLI's slowing backlog growth was likely unwelcome news. We are cutting our price target to $12.50 and maintaining our Neutral rating.' Shares of HOLI closed Tuesday at $11.23, down 4.26% from Monday's close.