Signs continue to mount that JinkoSolar’s (NYSE:JKS) financial results are poised to greatly improve going forward, pushing JinkoSolar stock much higher.
Specifically, multiple major solar companies have reported strong earnings numbers recently, while the EU and China remain on track to tremendously increase their use of solar energy.
And, indicating that JinkoSolar is well-positioned in Europe, the company recently won a huge deal there.
The worries about the impact of a loss by Joe Biden in the U.S. presidential election on solar companies is way overdone.
Strong Earnings by Multiple Solar Companies
Despite the novel-coronavirus pandemic, another Chinese module maker, Trina Solar, recently stated that its sales had jumped nearly 19% in the first three quarters of this year, versus the same period a year earlier. Trina cited higher foreign sales as a key reason for its success.
Further, U.S.-based solar giant First Solar (NASDAQ:FSLR) recently reported stronger-than-expected Q3 results, propelling its shares, as of Oct. 28, to their highest level in nine years. Also delivering a Q3 earnings beat late last month was solar inverter maker Enphase (NASDAQ:ENPH), whose shares are now less than 15% below their 52-week high.
These results and favorable stock reactions bode well for Jinko Solar’s Q3 results and for JinkoSolar stock. The company is due to report its Q3 results later this month.
China, the EU Are Moving Ahead With Large Carbon Reduction Plans
As I noted in my Oct. 2 column on JinkoSolar, China and the EU are looking to greatly reduce their carbon emissions in the coming decades.
Those plans still appear to be on track at this point. A Bank of China official was quoted in an Oct. 28 article as saying that Beijing would seek to aggressively promote wind and solar energy between 2021 and 2025. In September, the Chinese president promised to make the country carbon-neutral by 2060
Noting the latter pledge, a top Boston Consulting analyst recently estimated that:
“change of energy sources would have the biggest impact-accounting for around 70 percent of the total reduction in greenhouse gas emissions, mainly from clean power generation such as renewable{s}… in the energy sector and electrification in the transport sector.”
For its part, the EU is considering whether to raise its carbon reduction goal by 2030 to either 55% or 60%, Bloomberg reported on Oct. 23.
On Oct. 19, indicating that JinkoSolar is well-regarded and well-positioned in Europe, the company announced that it would supply an impressive 204 megawatts of its bifacial solar modules to what it called “the biggest bifacial solar project ever built in Europe.”
A Biden Loss Won’t Meaningfully Slow Solar
As I’ve noted previously, a Biden loss will not prevent China, the EU, many other countries, and a high number of U.S. states from rapidly adopting solar energy. Indeed, even Republican-led states are now getting into the act. For example, Arizona, which has a GOP governor, recently required the state’s utilities “to receive all their power from carbon-free sources such as solar and wind by 2050,” according to PV-Tech.
Consequently, the recent, sharp slide of solar names, including JinkoSolar, on fears of the re-election of President Donald Trump, was unjustified. And UBS was wrong when it, adding to the fear, cut its rating on JinkoSolar stock and three other solar names to “sell.” As justification for the downgrades, the firm cited its belief that U.S. pro-solar policies will be weaker than expected.
The Bottom Line on JinkoSolar Stock
JinkoSolar remains very well-positioned to benefit from policy initiatives and accelerating solar adoption in the U.S., China, the EU, and much of the rest of the world.
With JinkoSolar stock trading at a forward price-earnings ratio of just 16, a price-sales ratio of only 0.6, and a market capitalization of just $2.7 billion, the shares remain extremely attractive for longer-term investors.
On the date of publication, Larry Ramer held a long position in Jinko Solar.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.
