UPDATE: Sterne Agee Lowers PT on Power Integrations to $40

Sterne Agee is out with its report today on Power Integrations

, lowering its PT from $45 to $40. In its report, Sterne Agee writes, "We are keeping our target P/E at 20X (at a discount to its five-year historical average of 23X NTM EPS) and lowering our target price from $45 to $40 (20X 2012E EPS of $1.98). Of its $950 million market cap, more than $200 million is cash with no debt. Last quarter, POWI generated $35 million in operating cash flow and $28 million in free cash flow and had $46 million remaining in its share repurchase program. Maintain Buy." At the time of posting, shares of POWI were trading at $32.77, down 0.31% from Monday's close.