Goldman Sachs downgraded Daqo New Energy to Sell from Neutral on Tuesday, citing concerns over the solar producer’s rising production costs and execution risks in a softer pricing environment.
The bank lowered its price target to $10 from $11.20, implying a 26% downside to the stock’s $14.14 level at the time of the call. Daqo’s shares have fallen more than 42% over the past six months, underperforming peers amid weak demand and volatile polysilicon prices.
Analyst Mengwen Wang highlighted Daqo’s higher-than-peer production cost of Rmb 50 per kilogram, compared with Rmb 38 for GCL and Rmb 42 for Tongwei. The bank raised its 2026 polysilicon price estimate by 12% but reduced its shipment volume forecast by 40%, reflecting expectations of continued pricing pressure. Over the longer term, Goldman Sachs projects polysilicon prices will decline by 18% from 2026 levels through 2030.
Daqo’s second-quarter results underscored the challenges. The company reported adjusted losses of $1.20 per American Depositary Share, wider than the anticipated $0.53 loss, and revenue of $62.7 million, missing the consensus estimate of $114.7 million. Gross profit margin remained negative at 35% for the trailing twelve months.
Goldman Sachs also noted that Daqo’s early-stage expansion into AI data center infrastructure lacks near-term revenue potential, with incremental research, development and selling expenses expected to weigh on margins from 2027 through 2030. The downgrade follows a broader retreat in solar stocks as investors reassess profitability amid oversupply risks and policy uncertainty.
Daqo shares rose in premarket trading despite the downgrade, as some investors focused on signs of sequential recovery, reduced inventory write-downs and a strong balance sheet. The stock was last quoted at $14.43.
