Jefferies Raises Price Target on Dana Holding (DAN) as New Pricing Should Drive Earnings Upside
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Price: $30.35 +0.07%
Rating Summary:
11 Buy, 10 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
11 Buy, 10 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reaffirming its Buy rating on shares of Dana Holding (NYSE: DAN) and is raising its price target from $19 to $21 following earnings.
The company reported its quarterly results essentially inline with EPS of $0.45 and adjused EBITDA of $192 million, compared to the consensus of $0.42 and $197 million. The firm notes a lower tax rate raised earnings by $0.02 per share.
Dana's price changes will take roughly a year to be fully imprinted, but the firm notes it will allow management to reach its target of a 12 percent EBITDA margin by 2013. The price increase will also result in a 12 percent upside to the firms $1.68 earnings estimate for 2011.
An analyst at Jefferies comments, "In 2Q, DAN shares sold off 5.3% (vs. the S&P down 0.3%) despite beating consensus EPS by 22%. This quarter, the shares rallied 7.5% in a strong tape on an essentially inline report. There were two contrasts between the two reports: the obvious point that the market backdrop was materially different than during 2Q earnings; and more importantly, the first signs of margin leverage in the commercial vehicle segment. In addition, mgmt on the call said that it had repriced half of its CV contracts over the past three months. This contract repricing has been central to our thesis on DAN ."
For 2011 and 2012, Jefferies has increased its EPS estimates from $1.66 and $1.89 to $1.68 and $2.02.
For more ratings news on Dana Holding click here and for the rating history of Dana Holding click here.
Shares of Dana Holding closed at $14.98 yesterday.
The company reported its quarterly results essentially inline with EPS of $0.45 and adjused EBITDA of $192 million, compared to the consensus of $0.42 and $197 million. The firm notes a lower tax rate raised earnings by $0.02 per share.
Dana's price changes will take roughly a year to be fully imprinted, but the firm notes it will allow management to reach its target of a 12 percent EBITDA margin by 2013. The price increase will also result in a 12 percent upside to the firms $1.68 earnings estimate for 2011.
An analyst at Jefferies comments, "In 2Q, DAN shares sold off 5.3% (vs. the S&P down 0.3%) despite beating consensus EPS by 22%. This quarter, the shares rallied 7.5% in a strong tape on an essentially inline report. There were two contrasts between the two reports: the obvious point that the market backdrop was materially different than during 2Q earnings; and more importantly, the first signs of margin leverage in the commercial vehicle segment. In addition, mgmt on the call said that it had repriced half of its CV contracts over the past three months. This contract repricing has been central to our thesis on DAN ."
For 2011 and 2012, Jefferies has increased its EPS estimates from $1.66 and $1.89 to $1.68 and $2.02.
For more ratings news on Dana Holding click here and for the rating history of Dana Holding click here.
Shares of Dana Holding closed at $14.98 yesterday.
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