Analyst Downgrade Casts Shadow Over Daqo New Energy’s Prospects

Daqo New Energy finds itself in a challenging position, with a stark analyst downgrade highlighting fundamental weaknesses in the polysilicon market. While positive sector news is buoying some solar competitors, grim financial forecasts from Daqo's primary subsidiary are weighing heavily on investor sentiment.

• Research firm GLJ Research has shifted its rating on Daqo New Energy from "Buy" to "Sell."
• The firm's new price target for the stock is set at $18.13 per share.
• Daqo's subsidiary, Xinjiang Daqo, anticipates a net loss ranging from 1.0 to 1.3 billion RMB for the 2025 fiscal year.

Sector Divergence Leaves Daqo Behind

The solar market is currently presenting a tale of two segments. Reports of discussions between a team led by Elon Musk and Chinese photovoltaic suppliers sparked a rally among module manufacturers. JinkoSolar saw a notable pre-market gain of 13.7%, and SolarEdge shares also advanced significantly during the morning session.

Daqo New Energy, however, is unable to participate in this wave of optimism. As a supplier of the raw material polysilicon, the company is directly exposed to severe price declines within the supply chain. This raises a critical question for investors: Can Daqo reduce its operational costs swiftly enough to navigate this persistently difficult environment?

Should investors sell immediately? Or is it worth buying Daqo New Energy?

Drastic Price Target Reduction Highlights Structural Issues

The downgrade by GLJ Research, led by analyst Gordon Johnson, is rooted in a profound supply-demand imbalance. In China, polysilicon production capacity continues to significantly outstrip current market demand. This structural oversupply is expected to pressure manufacturer margins well into 2026.

This analyst skepticism aligns with the internal projections of Xinjiang Daqo. The subsidiary's forecast of substantial losses for 2025 underscores the immediate financial pressure. With Daqo's stock having opened at $23.20 yesterday, the newly established $18.13 price target implies considerable potential downside for the equity.

Investor Attention Turns to Forthcoming Financials

Market participants are now focusing on the company's next quarterly report, scheduled for release in late February 2026. Following a Q3 2025 revenue figure of $244.6 million, the primary concern has shifted to liquidity preservation. The upcoming financial data will provide a clearer picture of how severely falling raw material prices are impacting the balance sheet and the firm's ability to control costs effectively.