On Wednesday, Goldman Sachs (NYSE:GS) updated its outlook on JinkoSolar (NYSE:JKS) Holding Co., Ltd. (NYSE: JKS), increasing the price target to $20.00 from the previous $18.00 while keeping a Sell rating on the stock. The firm noted JinkoSolar's third-quarter earnings surpassed expectations, with revenue exceeding Goldman Sachs' own estimates and consensus figures. The improvement in gross margins was attributed to a favorable geographic sales mix and higher average selling prices (ASPs), driven by increased volumes in the United States.
Despite the positive third-quarter results, Goldman Sachs highlighted that JinkoSolar's management anticipates a potential downturn in the fourth quarter of 2024. The expected decline is due to seasonal trends and political risks that may impact shipment volumes in the U.S. Moreover, while there are indications of price stabilization outside the U.S., the firm expressed caution. It is awaiting the effects of reduced capacity expansions in China and the extent of industry consolidation, which are likely to affect module oversupply and consequently the ASPs.
In addition to the near-term outlook, JinkoSolar's management has revised its full-year 2024 module shipment guidance downward. The new forecast suggests shipments will be in the range of 90 gigawatts (GW) to 100GW, a decrease from the previously projected range of 100GW to 110GW. This represents approximately a 10% reduction at the midpoint of the guidance range.
Goldman Sachs' stance remains cautious due to the ongoing uncertainties in the market. The firm's analysts are closely monitoring the industry dynamics, including supply and pricing trends, to understand their potential impact on JinkoSolar's performance.
The updated price target reflects these considerations, as well as the current market conditions as assessed by Goldman Sachs.
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