UPDATE: Piper Jaffray Lowering Price Target On Suntech Power

Piper Jaffray is out with a research report on Suntech Power Holdings STP and is lowering its price target to $4 from $6, and keeping its Underweight rating on shares. In a note to clients, Piper Jaffray writes, "STP continues to suffer from its lack of vertical integration as it faces ASP pressure in 2H11 (high teens % decline in 3Q11, followed by low single digit in 4Q11). Gross margin guidance of 11-13% for 3Q disappoints, even as STP achieved in-house wafering capacity of 1.2GW. Its in-house wafer costs remained slightly above spot wafer ASP at $0.55 and its Cell-Module conversion costs are likely to remain flattish at $0.54/watt for the near-term. With opex estimated at 10% of sales and interest expense at 4% of sales, we estimate STP will likely be loss making in 3Q11 and 4Q11 versus consensus EPS estimates of $0.19 in both 3Q11 and 4Q11." Shares of STP lost 3 cents yesterday to close at $5.07.