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Dana (DAN) has drawn fresh attention after a recent stretch of strong share performance, including gains over the month and past 3 months, prompting investors to reassess how its current valuation lines up with fundamentals.
See our latest analysis for Dana.
That recent strength builds on a 47.45% 3 month share price return and a 20.16% 1 month share price return. The 1 year total shareholder return of 101.10% shows how much sentiment around Dana has shifted over a longer stretch.
If this kind of momentum has you looking beyond a single name, it could be a good moment to scan our list of 24 power grid technology and infrastructure stocks for more ideas tied to electrification and infrastructure themes.
With Dana trading close to analyst targets yet flagged as having an intrinsic discount, the real question is whether the recent rally still leaves upside on the table or if the market is already pricing in future growth.
With Dana’s fair value narrative sitting at $33.43 against a last close of $32.07, the gap is narrow enough that the underlying assumptions really matter.
The analysts have a consensus price target of $24.0 for Dana based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $26.0, and the most bearish reporting a price target of just $18.0.
Want to see what kind of earnings ramp and margin profile needs to unfold to back that higher fair value, plus the profit multiple it leans on? The most followed narrative lays out a detailed path for revenue shifts, margin rebuild and shrinking share count, all tied to a specific discount rate and future earnings power. The interesting part is how those moving pieces fit together without relying on today’s P/E at all.
Result: Fair Value of $33.43 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, the story could change quickly if cost savings are harder to deliver than expected or if a few large customers pull back on programs.
Find out about the key risks to this Dana narrative.
That fair value story leans on future cash flows, but today’s price also reflects what the market is willing to pay for current earnings. On that score, Dana trades on a P/E of 55.4x versus 25.3x for the US Auto Components industry, 18.3x for peers, and a fair ratio of 29.4x.
Put simply, the share price already assumes a lot going right. This raises the question: is this a rewarding opportunity, or a tighter margin of safety than the DCF suggests?
See what the numbers say about this price — find out in our valuation breakdown.
If parts of this story do not quite fit how you see Dana, or you simply prefer to work from your own assumptions, you can build a full view in just a few minutes with Do it your way.
A great starting point for your Dana research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
If Dana has sharpened your interest, do not stop here. Use the Simply Wall St screener to spot other opportunities that fit exactly what you care about.
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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