TD Cowen Downgrades ESS Tech to Hold, Stock Drops 6%

ESS Tech (NYSE:GWH) shares dropped more than 6% intra-day today after TD Cowen downgraded the company from Buy to Hold, with analysts slashing the price target from $10 to $3, citing mounting challenges tied to leadership changes, funding concerns, and extended timelines for profitability.

While acknowledging the company’s progress in reducing costs across its Energy Warehouse and Energy Center solutions, TD Cowen pointed out that ESS's strategic shift toward its Energy Base product—targeting higher power and longer-duration storage applications—is a necessary but risky transition, especially given recent pricing pressure in the lithium-ion battery market.

The downgrade is driven in part by uncertainties around ESS’s ongoing CEO search, combined with critical capital needs and a recent NYSE delisting notice, all of which cloud the near-term investment picture.

Although ESS maintains that its long-term gross margins could reach the high-30% range, that milestone appears to be several years away, and with no clear timeline to profitability, TD Cowen believes the stock will likely trade sideways in the near term.