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Dana Incorporated recently closed its Auburn Hills, Michigan plant and implemented layoffs after a substantial drop in customer orders for electric vehicles, reflecting broader industry challenges amid shifting demand and recent changes in federal EV incentives.
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This plant closure, alongside similar actions by other suppliers, highlights the ripple effects major automaker decisions and evolving electrification trends have on the automotive supply chain.
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We’ll explore how these plant closures, driven by declining EV demand, may alter Dana’s investment narrative and risk profile going forward.
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To be a shareholder in Dana, you need confidence in the company’s ability to maintain new business wins and execute aggressive cost reduction programs, even as electrification trends show mixed signals. The recent closure of the Auburn Hills plant after a downturn in electric vehicle (EV) orders underscores how vulnerable near-term results are to shifts in OEM production schedules, risking both revenue streams and future margin improvements, yet it is too soon to determine if this single event will materially change the company’s main catalysts or risks.
Among recent company announcements, the ongoing $0.10 per share quarterly dividend stands out. This payout signals management’s willingness to maintain shareholder returns despite industry uncertainty and possible volatility linked to EV program delays, which aligns closely with investor concerns about cash flow stability in a pivoting automotive market.
By contrast, investors should also be aware that supplier exposure to North American light vehicle cycles, amplified by customer manufacturing shifts, can…
Read the full narrative on Dana (it’s free!)
Dana’s narrative projects $8.1 billion revenue and $249.2 million earnings by 2028. This requires a 6.4% yearly revenue decline and a $221.2 million earnings increase from $28.0 million.
Uncover how Dana’s forecasts yield a $24.57 fair value, a 24% upside to its current price.
Two Simply Wall St Community fair value estimates for Dana range from US$15.03 to US$24.57 per share, reflecting significant differences in outlook. The recent EV-driven plant closure highlights why these perspectives vary and why it pays to examine how supplier concentration and OEM decisions may influence future results.
Explore 2 other fair value estimates on Dana – why the stock might be worth as much as 24% more than the current price!
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include DAN.
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