Jinko Solar (NYSE:JKS) -6.1% premarket after being slammed by two downgrades, at Morgan Stanley and Citigroup, following the stock's 41% run-up YTD and 24% during the past week. • Morgan Stanley downgrades JKS two notches to Underweight from Overweight with a $16.40 price target, cut from $19.40, expecting Q1 earnings to decline more than 50% below Wall Street estimates mainly due to lower margins and ASPs, and slow cost reductions given high polysilicon prices and OEM fees. • Stanley thinks the next 12-18 months will be difficult for China solar names, noting increased new capacity coming online, and believes a majority of manufacturers will struggle to reach breakeven in H2 2017 and 2018. • Also, Citigroup cuts shares to Sell from Neutral with a $15 price target, trimmed from $15.50, as investors have priced in an "overly bullish outlook," and the firm expects sales declines and margin contraction in Q3 as China's rush installation ends. |