Strength Seen in JinkSolar - Analyst Blog

On Dec 17, Zacks Investment Research upgraded JinkoSolar Holding Co., Ltd. JKS to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

JinkoSolar Holding has been witnessing rising earnings estimates on the back of strong earnings performance. The solar cell manufacturer delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 229.8%.

JinkoSolar Holding reported third quarter 2013 results with adjusted earnings per American Depositary Share (“ADS”) of $1.36 coming in much ahead of the Zacks Consensus Estimate of 35 cents. The results reflect a diversified customer base and improvement in operational efficiency in a rapidly changing solar power environment.

Taking into consideration the expected improvement in the solar industry the company raised its total solar module shipment expectations to the range of 1.7 GW to 1.8 GW for 2013 from its prior forecast of 1.5 GW to 1.7 GW.

The company was able to turn around its prior losses on the back of large-scale solar photovoltaic (PV) supply orders from countries like Australia, South Africa and the U.K. In addition, effective project execution skills as well as a favorable renewable policy adopted by the Chinese government have elevated its position in the market.

The improvement in the North American solar market is further expected to boost the performance of the company. The company expects 12% to 14% of global shipment in 2014 to be directed to North American countries. Japan will account for another 12% of total shipment in 2014.

The Zacks Consensus Estimate for 2013 increased 295.6% in the last 30 days to 91 cents per share, which reflects year-over-year growth of 108.9%. For 2014 estimates increased 248.9% in the last 30 days to $1.71 per share, which reflects year-over-year growth of 87.9%.

Other stocks from the sector worth considering are Enphase Energy, Inc. ENPH, First Solar, Inc. FSLR and Trina Solar Limited TSL.  All these stocks currently carry a Zacks Rank #2 (Buy).