On Thursday, GLJ Research lowered its price target on JinkoSolar Holding Co., Ltd. (NYSE:JKS) to $10.95 from $13.08, while maintaining a Sell rating. The firm cited concerns over potential tariffs from the Trump administration and a projected oversupply in the solar industry by 2025. The stock, currently trading at $19.60, has already declined nearly 20% year-to-date. According to InvestingPro analysis, JKS appears undervalued based on its Fair Value metrics and trades at a notably low Price/Book ratio of 0.37.
Analysts at GLJ Research highlighted three primary challenges they believe JinkoSolar is facing. First, they pointed out that President Trump has indicated that universal tariffs would be applied to solar panel imports, with potential rates as high as 200%. This could significantly impact JinkoSolar's $1 billion 10GW n-type cell plant under construction in Saudi Arabia, which is intended to primarily supply the U.S. market. Second, the current anti-dumping (AD) rate of 17.84% and countervailing duty (CVD) rate of 3.47% on JinkoSolar's Southeast Asian imports to the U.S. are retroactive, potentially creating a substantial cash liability for the company. Lastly, analysts noted that the nine largest Chinese cell suppliers are expected to exceed global demand by 2025, leading to an oversupply that could pressure prices and margins.
The research firm also provided insights into JinkoSolar's financial outlook, suggesting that the company's revenue and adjusted earnings per share (EPS) for 2025 could fall significantly below consensus estimates. InvestingPro data reveals several important metrics that investors should consider, including a gross profit margin of 12.8% and an EBITDA of $1.7 billion for the last twelve months. For deeper insights into JKS's financial health and valuation metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. They forecast 2025 revenue and adjusted EPS at $12.5 billion and -$1.01, respectively, compared to the consensus estimates of $12.8 billion and $2.83.
For the fourth quarter of 2024, GLJ Research expects JinkoSolar to report revenue of $2.894 billion and an adjusted EPS of -$0.42, which would be a notable miss compared to Wall Street's expectations of $2.330 billion and -$0.28. This projection follows an update from Jiangxi Jinko, a majority-owned principal operating subsidiary of JinkoSolar, which guided its adjusted net income for the full year of 2024 to decrease by 98.39% to 98.92%.
The report from GLJ Research provides a cautious view of JinkoSolar's future performance, influenced by policy risks and market conditions that could adversely affect the company's profitability and market position. InvestingPro subscribers have access to 13 additional ProTips and extensive financial metrics that can help evaluate these risks and opportunities in detail, including real-time updates on valuation metrics and industry comparisons.
In other recent news, JinkoSolar Holding Co., Ltd. reported a significant decline in net income for the year ended December 31, 2024, by its principal operating subsidiary, Jiangxi Jinko. The company expects a net loss, excluding extraordinary gains and losses, to range from RMB750 million to RMB1,050 million, contrasting sharply with the income reported in the prior year. In the third quarter, JinkoSolar exceeded expectations with a net income of $3.2 million and total revenue of approximately $3.5 billion.
Goldman Sachs upgraded its price target for JinkoSolar to $20.00 from $18.00, maintaining a 'Sell' rating. The firm noted potential downturns due to seasonal trends and political risks.
JinkoSolar has revised its full-year 2024 module shipment guidance downward, expecting shipments to be in the range of 90 to 100 gigawatts. The company also plans to list Global Depositary Receipts (GDR) in Frankfurt by the second quarter of 2024, which is expected to result in a 5% to 6% dilution.
In other developments, JinkoSolar announced its upcoming Annual General Meeting (AGM) for shareholders to vote on various company matters. These are the recent developments for JinkoSolar.
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