The upward revision in Daqo New Energy’s consensus price target to $26.58 is driven by optimism around China’s restructuring policies, anticipated higher polysilicon prices, and reduced capital spending supporting future profitability, despite near-term earnings volatility.
Analyst Commentary
- Bullish analysts cite the anticipated impact of China's new anti-involution policy and proposed market restructuring, including production quotas and potential closures of smaller competitors, as likely catalysts for a turnaround in industry margins and Daqo’s profitability.
- Higher polysilicon prices and stronger operating cash flow expectations prompt upward revisions in profit estimates and price targets among bullish analysts, with reduced capital spending further supporting the company's financial flexibility.
- Despite recent quarterly results showing sales below cost and a miss in Q2, the company's decision to deliberately limit production amid low spot prices is viewed by some analysts as a strategic move ahead of forecast “explosive earnings growth” in the latter half of the year.
- Some analysts highlight that the market may be underestimating the significance of Daqo’s forward guidance, suggesting street concerns over policy impacts are overstated relative to underlying earnings power recovery.
- Neutral or cautious analysts remain on the sidelines pending clearer evidence of industry right-sizing and a return to sustainably healthy margins, expressing uncertainty until improved profitability is realized.
What's in the News
- Board authorized a share buyback plan.
- Company will repurchase up to $100 million in stock, funded mainly from existing cash, with the program valid until December 31, 2026.
- Issued production guidance for Q3 2025 at 27,000–30,000 MT of polysilicon, and full-year 2025 guidance at 110,000–140,000 MT, including the impact of facility maintenance.
Valuation Changes
Summary of Valuation Changes for Daqo New Energy
- The Consensus Analyst Price Target has risen slightly from $25.43 to $26.58.
- The Future P/E for Daqo New Energy has significantly risen from 10.70x to 11.97x.
- The Net Profit Margin for Daqo New Energy has fallen from 9.64% to 9.16%.
Disclaimer
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