Earnings Miss: Dana Incorporated Missed EPS By 57% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Dana Incorporated (NYSE:DAN) filed its yearly result this time last week. The early response was not positive, with shares down 9.9% to US$12.50 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$0.26, some 57% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$11b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dana after the latest results.

See our latest analysis for Dana

Taking into account the latest results, the current consensus from Dana's eight analysts is for revenues of US$10.9b in 2024. This would reflect an okay 3.5% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 165% to US$0.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.0b and earnings per share (EPS) of US$1.15 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at US$15.75, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Dana at US$19.00 per share, while the most bearish prices it at US$13.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Dana's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 6.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Dana.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dana. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dana's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$15.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Dana. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Dana analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Dana you should know about.

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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.