The Zacks Analyst Blog Highlights: Genesco, JinkoSolar Holding, Trina Solar, Yingli Green Energy Holding and SunPower
CHICAGO, Oct. 2, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Genesco Inc (NYSE:GCO-Free Report), JinkoSolar Holding Co., Ltd. (NYSE:JKS-Free Report), Trina Solar Limited (NYSE:TSL-Free Report), Yingli Green Energy Holding Co. Ltd. (NYSE:YGE-Free Report) and SunPower Corp. (Nasdaq:SPWR-Free Report).
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Here are highlights from Tuesday's Analyst Blog:
Genesco Downgraded to Strong Sell
Zacks Investment Research downgraded Genesco Inc (NYSE:GCO-Free Report) to a Zacks Rank #5 (Strong Sell) on Sep 28. Disappointing second quarter fiscal 2014 results and a tempered fiscal 2014 outlook led to the downgrade.
Why the Downgrade?
On Aug 29, Genesco reported dismal second quarter of fiscal 2014 (ending Aug 3, 2013) results. Though earnings of 56 cents per share grew 12% year over year, it missed the Zacks Consensus Estimate by 9.7%. We believe a challenging sales environment and lower comparable store sales (comps) growth led to the earnings miss.
Genesco's sales increased 5.7% year over year to $574.7 million, but missed the Zacks Consensus Estimate by 13.7%. Comparable store sales declined 2% in the quarter due to lower consumer traffic. The comparable store sales improvement of 7% in Johnston & Murphy Retail was more than offset by the decline in comps in The Lids Sports Group, Journeys Group and Schuh Group.
Lower-than-expected sales were due to challenging retail/sales environment as consumers were more conscious about their spending habits and avoided unnecessary expenses.
The restrained consumer spending environment in the U.S. emanated from the recent hike in payroll taxes and higher gas prices. Besides taxes, weak pay and a tepid rate of hiring also curbed consumer spending leading to lackluster sales. Moreover, the company believes the gloomy consumer spending environment will not improve much in the next few quarters.
Genesco also began the back-to-school (August-September) on a disappointing note; recording a comp sales decline of 3% as of Aug 24. Based on a sluggish start to the third quarter, Genesco expects comparable store sales to fall about 1%-2% in the third quarter fiscal 2014.
Genesco also reduced its guidance for fiscal 2014 and now expects adjusted earnings per share in the range of $5.20 to $5.30 per share compared with the prior range of $5.57 to $5.67 per share. The company expects comparable store sales increase in the low single-digit range for fiscal 2014.
JinkoSolar Up on SGCC Deal
JinkoSolar Holding Co., Ltd. (NYSE:JKS-Free Report) will supply one-third of the solar modules required by State Grid Corporation of China ("SGCC"), for a power project in Hebei Province. Moreover, the Chinese government's announcement to provide low-cost financing for new solar projects has propelled the company' share price by 0.22% to $22.55 on Monday.
The power project requires 60 megawatt (MW) of modules and the company will deliver highly-efficient solar modules with an electric generation capacity of 20 megawatt (MW) in the fourth quarter of 2013. SGCC is the largest electric power transmission and distribution company in the world. It transmits and distributes power in China.
Located in Zhangbei County, Hebei Province, this power project covers approximately 200 square Kms. With a total investment of approximately RMB 12 billion, the project includes 500 MW of wind power, 100 MW of solar power, and 110 MW of power storage system. Thus, this large and comprehensive facility will integrate wind and solar power generation as well as power storage and smart grid technology, supporting China's national renewable energy development strategy.
JinkoSolar is busy expanding its footprint in the Asian, African and European markets to offset the overall slowdown in U.S. orders. The company has successfully won numerous orders from these regions. Recently, the company entered into an agreement with Spain-based renewable energy developer Acciona to deliver a total of 274 megawatt-peak (MWp) solar PV modules.
Recently, Chinese solar stocks like Trina Solar Limited (NYSE:TSL-Free Report) and Yingli Green Energy Holding Co. Ltd. (NYSE:YGE-Free Report) have seen their share prices rise as the Chinese government is now offering local solar manufacturers a 50% value-added tax rebate for sales taking place from Oct 2013 through Dec 2015.
Post announcement, JinkoSolar has made a 52-week high of $23.40 on Sep 30, 2013. A steady flow of contracts for its highly efficient solar products and issuance of 4.37 million new American Depositary Shares at $16.25 also acted as drivers.
The Chinese solar players are now at par with their international peers, like SunPower Corp. (Nasdaq:SPWR-Free Report), in terms of technological upgrades and manufacturing efficiencies.
While SunPower Corp. presently has a short-term Zacks Rank #1 (Strong Buy), JinkoSolar and Trina Solar have a short-term Zacks Rank #2 (Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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