Shareholders might have noticed that Jinko Solar Co., Ltd. (SHSE:688223) filed its yearly result this time last week. The early response was not positive, with shares down 3.1% to CN¥7.59 in the past week. Jinko Solar beat revenue expectations by 5.0%, at CN¥119b. Statutory earnings per share (EPS) came in at CN¥0.75, some 4.7% short of analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the consensus from Jinko Solar's 14 analysts is for revenues of CN¥109.8b in 2024, which would reflect a measurable 7.5% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to dive 32% to CN¥0.51 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥122.6b and earnings per share (EPS) of CN¥0.55 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 10% to CN¥9.52. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Jinko Solar, with the most bullish analyst valuing it at CN¥13.42 and the most bearish at CN¥5.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 7.5% annualised decline to the end of 2024. That is a notable change from historical growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. It's pretty clear that Jinko Solar's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jinko Solar. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Jinko Solar going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Jinko Solar that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.