Citi analyst Air Ma lowered the price target on Daqo New Energy (NYSE: DQ) to $16.00 from $26.00, while maintaining a Buy rating on the stock.

The analyst cited a slower polysilicon recovery trajectory and lower shipment assumptions as reasons for the revision, noting the price target reduction of 38% reflects cuts to earnings estimates.

Daqo plans to remove 30,000 to 40,000 tonnes of old production capacity. The analyst expects the industry's effective capacity to reduce from 2.0 million tonnes to 1.5 million tonnes by the end of 2027.

Ma noted that for every 1.0 yuan per kilogram rise in polysilicon price, Daqo's projected 2027 net loss would decrease by $10 million, or 17% from the base case.