CFRA raises Dana Holding price target to $12, retains sell rating

Published 20/02/2025, 19:32
CFRA raises Dana Holding price target to $12, retains sell rating

On Thursday, CFRA analyst Garrett Nelson updated the financial outlook for Dana Holding (NYSE:DAN), increasing the price target to $12.00 from the previously set $10.00, while still advising a Sell rating on the stock. Currently trading at $16.1, Dana has shown remarkable momentum with a 55% gain over the past six months and is trading near its 52-week high of $16.89. Nelson’s revised target is based on a projected 2026 P/E ratio of 7.5x, which he considers a significant, albeit warranted, discount to the company’s historical averages. According to InvestingPro, other analysts maintain more optimistic views, with price targets ranging from $13 to $23.

Dana Holding reported a Q4 adjusted EPS of $0.25, surpassing the $0.09 consensus and marking a notable improvement from the -$0.08 recorded in the same quarter of the previous year. This earnings beat was attributed to stronger-than-expected margins. Despite a 6% decrease in revenue to $2.34 billion, which was consistent with consensus estimates, Dana’s adjusted EBITDA margin widened by 170 basis points to 8.0%, slightly exceeding the consensus by 10 basis points. InvestingPro data shows the company still faces challenges with weak gross profit margins at 8.69%, though four analysts have recently revised their earnings expectations upward.

The company has also provided its 2025 financial guidance, projecting net sales to range between $9.525 billion and $10.025 billion, with adjusted EPS estimated between $1.40 and $1.90. These forecasts are more optimistic than the current consensus, which anticipates net sales of $9.65 billion and adjusted EPS of $1.20. InvestingPro analysis reveals over 12 additional key insights about Dana’s financial outlook, available exclusively to subscribers through comprehensive Pro Research Reports covering 1,400+ top stocks.

Although Dana has exhibited strong performance within the auto parts and equipment sector in recent months, Nelson suggests that the market has already accounted for the positive impacts of cost savings and efficiency improvements. He cautions that there are considerable risks to the company’s guidance, citing potential issues arising from tariffs and end-market demand. As a result, the Sell rating remains unchanged despite the raised price target. For a deeper understanding of Dana’s financial health, which InvestingPro currently rates as FAIR with a score of 2.26, investors can access detailed metrics and expert analysis through the platform’s comprehensive research tools.

In other recent news, Dana Incorporated reported fourth-quarter earnings that exceeded analyst expectations, though its revenue fell short. The company posted adjusted earnings per share of $0.25, surpassing the analyst consensus of $0.10, while revenue amounted to $2.34 billion, missing the anticipated $2.38 billion. Dana also provided 2025 guidance with earnings per share projected between $1.40 and $1.90, which is above the $1.20 analyst expectation. The company forecasts 2025 revenue in the range of $9.525 billion to $10.025 billion, compared to the $9.651 billion consensus estimate. Dana plans to focus on cost streamlining and improving operational efficiency in 2025 to enhance profitability. The company is targeting adjusted EBITDA margins of 9.7% to 10.2% this year, an increase from 8.6% in 2024. These developments reflect Dana’s strategy to drive profit and cash flow gains through efficiency improvements and cost-saving actions.

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