Dana Incorporated (NYSE:DAN) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 9.8% to hit US$2.0b. Dana also reported a statutory profit of US$0.31, which was an impressive 59% above what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. NYSE:DAN Earnings and Revenue Growth October 30th 2020
Taking into account the latest results, the most recent consensus for Dana from eight analysts is for revenues of US$8.07b in 2021 which, if met, would be a solid 16% increase on its sales over the past 12 months. Statutory earnings per share are predicted to shoot up 1,819% to US$1.86. In the lead-up to this report, the analysts had been modelling revenues of US$7.92b and earnings per share (EPS) of US$1.77 in 2021. So the consensus seems to have become somewhat more optimistic on Dana's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to US$19.44. 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. The most optimistic Dana analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$17.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Dana's growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 7.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dana to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dana following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. At Simply Wall St, we have a full range of analyst estimates for Dana going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 4 warning signs for Dana (1 is a bit unpleasant!) that you need to be mindful of.
This article by Simply Wall St is general in nature. 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.
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