Earnings Miss: Dana Incorporated Missed EPS By 84% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for Dana Incorporated (NYSE:DAN), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$2.5b, statutory earnings missed forecasts by an incredible 84%, coming in at just US$0.03 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Dana

Taking into account the latest results, Dana's seven analysts currently expect revenues in 2025 to be US$10.5b, approximately in line with the last 12 months. Dana is also expected to turn profitable, with statutory earnings of US$0.46 per share. Before this earnings report, the analysts had been forecasting revenues of US$10.8b and earnings per share (EPS) of US$0.76 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 15% to US$10.43, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dana, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$7.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Dana's revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2025 being well below the historical 7.7% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Dana is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Dana analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Dana has 2 warning signs we think you should be aware of.

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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.