Goldman Sachs Downgrades Daqo New Energy (DQ) to Sell

Goldman Sachs analyst Mengwen Wang downgraded Daqo New Energy (NYSE: DQ) from Neutral to Sell with a price target of $10.00 (from $11.20).

The analyst comments: “We believe the current valuation has priced in a greater degree of optimism for the new round of Poly price hike execution. Our updated target price for Daqo ADR at US$10 (vs US$11.20 prior) implies 26% potential downside vs. average downside of 6% for our Solar coverage, we downgrade Daqo ADR to Sell from Neutral.

We believe that Daqo’s higher-than-peer production cost (Rmb 50/kg per Mgmt. vs. Rmb38/kg for GCL and Rmb42/kg for Tongwei by GSe) could dampen its shipment outlook as Daqo aims to raise pricing above its total production cost level. Moreover, we believe this round of Poly price hike could be shorter than last year due to less upstream bargaining power against higher downstream inventory levels. Therefore, we lift Poly price by 12% and lower shipment volume by 40% in 2026E to reflect Mgmt’s near term business strategy, and we keep our pricing and volume outlook unchanged in 27E-30E (Poly price to decline by 18% from 2026, and UTR to decline to 30% vs. 55% in 2026). Furthermore, despite that we are encouraged to see Daqo’s move to AIDC infrastructure business, such business appears to be at a very early stage, and therefore we estimate no revenue accretion but increased R&D and selling expenses in 2027E-2030E.”

For an analyst ratings summary and ratings history on Daqo New Energy click here. For more ratings news on Daqo New Energy click here.

Shares of Daqo New Energy closed at $14.43 yesterday.

You May Also Be Interested In

• Wolfe Research Downgrades Klarna (KLAR) to Peerperform
• BofA Securities Downgrades Urban Company (URBANCO:IN) to Underperform
• Canaccord Upgrades ARB Corp Ltd (ARB:AU) to Buy