On Thursday, JinkoSolar (NYSE:JKS) Holding Co., Ltd. (NYSE:JKS) experienced a downgrade in its stock rating from Buy to Neutral by Roth/MKM, accompanied by a significant reduction in its price target to $25 from the previous $50. This decision followed a decline in the company's stock by 6%, in contrast to the TAN Index, which saw a 2% increase.
The downgrade was prompted by concerns over the solar panel manufacturer's near-term profitability prospects. The company's margin outlook indicates that margins for the first and second quarters of 2024 are expected to be lower than those reported in the fourth quarter of 2023. The analyst from Roth/MKM cited this margin outlook as a key reason for the market's negative reaction to the stock.
Despite the current oversupply challenges facing the solar industry, JinkoSolar is recognized for its competitive position, owing to its leading TOPCon technology and cost structure. The firm acknowledged the company's potential to increase its market share amidst these industry-wide issues.
However, the analyst emphasized a cautious approach, choosing to step aside until there is an improvement in JinkoSolar's margins and profitability. This conservative stance reflects the firm's wait-and-see attitude towards the company's financial performance in the upcoming quarters.
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