Goldman Sachs (NYSE:GS) has reiterated its Sell rating on JinkoSolar (NYSE:JKS) Holding Co., Ltd. (NYSE: JKS) with a steady price target of $18.00. Following the release of the company's second-quarter 2024 financial results, the firm's analysis highlighted mixed performance. JinkoSolar's revenue fell short of both Goldman Sachs' expectations and the consensus.
The company also saw a continuation of weakening gross margins. However, earnings per American depositary share (EPADS) were in line with the firm's estimates and the general consensus.
JinkoSolar's management has slightly lowered its shipment guidance for the third quarter of 2024, forecasting 23 to 25 gigawatts (GW) compared to the 29GW anticipated by Goldman Sachs.
Nevertheless, the company maintains its full-year 2024 guidance of 100 to 110GW. Despite early signs of market consolidation, management anticipates it will take several quarters before the market sees more rational pricing.
The analyst noted that average selling prices (ASPs) and margins are expected to remain under pressure for the foreseeable future. JinkoSolar's current business environment is marked by challenges in pricing and margin retention.
In other recent news, JinkoSolar reported substantial growth in module shipments for the second quarter of 2024, despite industry-wide challenges. The company's earnings call revealed a steady gross margin of 11.1% and an adjusted net income of $52.1 million. The company's total revenue for the quarter was $3.3 billion, despite a year-over-year decline due to lower average selling prices.
In the midst of these developments, JinkoSolar announced a strategic partnership to produce 10 gigawatts of high-efficiency solar cells and modules in Saudi Arabia. The company also anticipates a full-year 2024 module shipment forecast between 100 and 110 gigawatts.
Despite a reported net loss of $13.9 million for the quarter, JinkoSolar remains optimistic about cost reductions and gradual market improvements. The company is also focusing on expansion plans in the Middle East, especially in Saudi Arabia, and aims to achieve a net produced N-type cell efficiency of 26.5% by year-end.
InvestingPro Insights
Amid the cautious outlook by Goldman Sachs, JinkoSolar Holding Co., Ltd. (NYSE:JKS) presents a mixed bag of financial metrics and market expectations. According to recent data from InvestingPro, JinkoSolar is trading at a low Price / Book multiple of 0.35 and a low earnings multiple, with a P/E Ratio currently at 5.07. These figures suggest that the company's stock might be undervalued relative to its book value and earnings, which could be of interest to value investors.
The company's significant dividend yield of 15.46% stands out, especially in the context of the broader market, potentially offering an attractive income stream for investors. However, this comes alongside a notable decline in revenue growth on a quarterly basis, reported at -21.61%, and a gross profit margin that InvestingPro has flagged as weak, at 13.99%.
InvestingPro Tips indicate that while analysts anticipate a sales decline in the current year and expect net income to drop, they also predict the company will remain profitable this year. For investors looking for more detailed analysis, InvestingPro offers additional insights, with 10 more tips available for JinkoSolar at https://www.investing.com/pro/JKS.
Overall, the InvestingPro data and tips provide a deeper understanding of JinkoSolar's financial standing and market valuation, which could be pivotal for investors considering Goldman Sachs' sell rating and the company's market position within the volatile solar industry.
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