Dana (NYSE:DAN): Assessing Valuation After Detroit Facility Shutdown and EV Market Challenges

Dana (NYSE:DAN) recently closed a Detroit facility and let go of 200 workers in response to lower demand for electric vehicles. This shift comes after federal incentives for EV buyers were removed, which has impacted ongoing orders in the sector.

See our latest analysis for Dana.

Despite this challenging EV backdrop, Dana’s share price momentum has stayed remarkably strong, climbing nearly 75% so far this year and finishing at $19.67. The latest wave of news, which includes a dividend announcement and a new board appointment, briefly shifted sentiment. However, the real driver has been the company’s resilient long-term narrative, as reflected in a standout one-year total shareholder return of almost 99%. As market demand evolves, investors seem to be weighing medium-term risks and opportunities with greater focus.

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Given the stock’s rapid climb and upbeat analyst targets, the key question now is whether Dana offers further upside for new investors or if recent gains already reflect all the company’s potential for future growth.

Most Popular Narrative: 19.9% Undervalued

With Dana's most-followed narrative assigning a fair value of $24.57, the latest close at $19.67 points to significant upside if the long-term vision plays out. This narrative considers ambitious operational targets and electrification growth potential as key catalysts ahead.

The company's robust new business wins and three-year sales backlog, anchored by major electrified and light vehicle programs (for example, JLR, Ford Super Duty, Wrangler), position Dana to capitalize on the accelerating shift toward electric and next-generation mobility. This supports higher recurring revenues and potential share gains.

Read the complete narrative.

Want to see the projections fueling Dana's bullish outlook? One bold forecast around future profits could change how you see this auto supplier’s valuation. Are rising margins and cash flow really the secret ingredient? Uncover the details that justify this target.

Result: Fair Value of $24.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps around cost reduction or an unexpected slowdown in key North American markets could quickly challenge the optimistic view for the long term.

Find out about the key risks to this Dana narrative.

Another View: Multiples Send a Cautionary Signal

While analyst models suggest potential upside, the current price-to-earnings ratio for Dana is a striking 92.1x. This is dramatically higher than both the Auto Components industry average of 18.4x and the peer average of 13.3x. Even when compared to the fair ratio of 43.3x indicated by the market, Dana looks expensive. Such a gap points to higher valuation risk if growth targets are missed. Is this optimism justified or could expectations be running too hot?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Dana Narrative

If you want a different perspective or prefer digging into the numbers on your own terms, it only takes a few minutes to assemble your own view. 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.

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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.