JinkoSolar shares target reduced as Q3 pricing outlook remains unclear - Roth/MKM

On Wednesday, Roth/MKM adjusted its outlook for JinkoSolar (NYSE:JKS) Holding Co., Ltd. (NYSE:JKS) stock, a leading solar panel manufacturer. The firm reduced the price target to $20.00 from the previous $25.00 while keeping a Neutral rating.

The decision follows JinkoSolar's second-quarter earnings, which fell short of expectations, although the company affirmed its module shipment guidance for 2024.

The analyst from Roth/MKM noted that average selling prices (ASPs) are being pressured by an oversupply across the supply chain. Despite this, the third quarter is projected to mark the lowest point, with recovery prospects in pricing remaining uncertain.

JinkoSolar's advantageous position, due to its leading TOPCon technology and cost structure, is expected to help it sustain shipment volumes even amidst the industry's oversupply.

JinkoSolar's performance is also shadowed by the unpredictability of U.S. policies, which include various tariffs and trade measures like the Solar Energy Industries Association (SEIA) Anti-Dumping/Countervailing Duties (AD/CVD), critical circumstances, and the Foreign-Produced Direct Product Rule (FEOC). These factors pose significant risks to JinkoSolar's operations, particularly in the U.S. market.

The analyst's commentary highlighted that while JinkoSolar's strong market position could help it navigate through industry challenges, the current environment presents several hurdles that affect pricing and could impact future performance. The revised price target reflects these considerations as the company continues to operate in a complex and competitive sector.

InvestingPro Insights

As investors digest the recent outlook adjustment for JinkoSolar Holding Co., Ltd. (NYSE:JKS) by Roth/MKM, real-time data from InvestingPro provides additional context. JinkoSolar is currently trading at a low Price / Book multiple of 0.33, suggesting that the stock may be undervalued relative to the company's book value. Additionally, the company's P/E Ratio stands at an attractive 5.07, indicating a potentially lower valuation compared to earnings. Despite concerns over the company's gross profit margins, which stand at 13.99%, JinkoSolar pays a significant dividend to shareholders, with a current yield of 16.43%, a notable return in today's market.

InvestingPro Tips also highlight that JinkoSolar is a prominent player in the Semiconductors & Semiconductor Equipment industry and that analysts predict the company will be profitable this year, with a profitable track record over the last twelve months. These factors may offer some reassurance to investors concerned about the near-term challenges highlighted by Roth/MKM. For those looking for further insights, InvestingPro features additional tips on JinkoSolar, which can be found at InvestingPro.

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