Strength Seen in Daqo (DQ): Can Its 6.4% Jump Turn into More Strength?
Daqo New Energy (DQ) shares soared 6.4% in the last trading session to close at $25.86. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 25.3% gain over the past four weeks.
Optimism over strong customer demand for polysilicon seemed to have driven the stock higher. The company is benefiting from strong demand for its high-quality N-type polysilicon despite headwinds from lower polysilicon selling prices. Its energy efficiency efforts and enhanced manufacturing efficiencies are also contributing to lower costs. Production from Inner Mongolia 5A and 5B is also expected to drive year-over-year growth in DQ’s overall production volumes in 2024.
This solar panel parts maker is expected to post quarterly earnings of $0.56 per share in its upcoming report, which represents a year-over-year change of -84.1%. Revenues are expected to be $491.9 million, down 30.7% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Daqo, the consensus EPS estimate for the quarter has been revised 18.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on DQ going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Daqo is part of the Zacks Chemical - Specialty industry. Minerals Technologies (MTX), another stock in the same industry, closed the last trading session 1.1% higher at $72.77. MTX has returned 4.7% in the past month.
Minerals Technologies' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.27. Compared to the company's year-ago EPS, this represents a change of +11.4%. Minerals Technologies currently boasts a Zacks Rank of #3 (Hold).
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