Jinko Holdings Limited (NYSE:JKS) Just Reported, And Analysts Assigned A US$18.60 Price Target
It's been a good week for Jinko Holdings Limited (NYSE:JKS) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.6% to US$8.63. Revenues of CN¥14b missed forecasts by 19%, but at least statutory losses were much smaller than expected, with per-share losses of CN¥0.80 coming in 84% smaller than what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Jinko Holdings' six analysts are now forecasting revenues of CN¥76.2b in 2027. This would be a huge 37% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Jinko Holdings forecast to report a statutory profit of CN¥5.42 per share. Before this earnings announcement, the analysts had been modelling revenues of CN¥80.4b and losses of CN¥0.37 per share in 2027. While we note the small dip in to the revenue outlook, the analysts are now also predicting for the business to become profitable next year - sooner than previously forecast - which looks like a pretty clear lift in expectations.
View our latest analysis for Jinko Holdings
The analysts have cut their price target 9.0% to US$18.60per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Jinko Holdings, with the most bullish analyst valuing it at US$32.61 and the most bearish at US$7.00 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. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the 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. It's clear from the latest estimates that Jinko Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 2.8% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 26% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jinko Holdings is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts now expect Jinko Holdings to become profitable next year, compared to previous expectations that it would report a loss. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Jinko Holdings going out to 2028, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Jinko Holdings (1 is potentially serious!) that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.