Stephens initiates Dorman Products stock with Overweight rating, $185 target

Investing.com - Stephens initiated coverage on Dorman Products (NASDAQ:DORM) with an Overweight rating and a $185.00 price target on Tuesday. According to InvestingPro data, the company has demonstrated strong financial performance with a 25.71% return over the past six months and maintains a healthy current ratio of 2.74.

The research firm views Dorman Products as a secular growth story benefiting from declining auto affordability, an aging car park, and the variety of propulsion systems in the market.

Stephens highlighted that Dorman’s internal motto emphasizes the critical nature of its products: "if you need a Dorman part, then you either aren’t moving or aren’t moving safely."

The $185 price target is based on a 12.5x EV/NTM EBITDA multiple, which implies a P/E ratio of 19.1x, according to Stephens’ analysis.

Despite Dorman Products trading near all-time highs with an approximately $4.8 billion market cap, Stephens considers the company "relatively undiscovered and under owned" and views it as a "net tariff beneficiary."

In other recent news, Dorman Products reported strong financial results for the second quarter of 2025, exceeding both earnings and revenue forecasts. The company posted an adjusted earnings per share of $2.06, surpassing the anticipated $1.85, and achieved revenue of $541 million, which was higher than the expected $525.03 million. This represents an 8% increase in revenue compared to the previous year. In addition to these financial results, Dorman Products has caught the attention of analysts. BMO Capital initiated coverage with an Outperform rating, citing the resilience of Dorman’s core light-vehicle business as a key strength. Similarly, Wells Fargo began coverage with an Overweight rating, emphasizing the company’s innovative strategy in the automotive aftermarket sector. These recent developments highlight the company’s performance and strategic direction.

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