CN¥8.06: That's What Analysts Think Jinko Solar Co., Ltd. (SHSE:688223) Is Worth After Its Latest Results

Investors in Jinko Solar Co., Ltd. (SHSE:688223) had a good week, as its shares rose 3.0% to close at CN¥7.13 following the release of its second-quarter results. Revenues came in 2.6% below expectations, at CN¥24b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.75 being roughly in line with 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Jinko Solar

Taking into account the latest results, the 13 analysts covering Jinko Solar provided consensus estimates of CN¥104.0b revenue in 2024, which would reflect a discernible 7.4% decline over the past 12 months. Statutory earnings per share are expected to plummet 34% to CN¥0.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥107.6b and earnings per share (EPS) of CN¥0.44 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 7.5% to CN¥8.06, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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¥4.11 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 14% annualised decline to the end of 2024. That is a notable change from historical growth of 9.2% over the last year. 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Jinko Solar is expected to lag 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Jinko Solar's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Jinko Solar. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Jinko Solar analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Jinko Solar has 2 warning signs we think 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.