DAN - Embedded Expectations Analysis - 2021 01 29
Dana Incorporated (DAN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 14.3x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about commercial truck demand, their electric systems, and free cash flowSpecifically, management may have concerns about the sustainability of demand for light vehicles, the expected softening in medium and heavy-duty truck demand, and the sustainability of inorganic growth from the Graziano and Fairfield acquisitions. Furthermore, they may be overstating their focus on partnering with customers, the capabilities of their electric systems, and their industry leader positioning in e-Propulsion. Additionally, management may be concerned about margin seasonality, the impact of shutdowns on their free cash flow, and the sustainability of low commodity costs
Dana is engaged in providing power-conveyance and energy-management solutions for vehicles and machinery. The company's operating segments are: Light Vehicle Drive Systems, which include light trucks (full frame), sport utility vehicles, crossover utility vehicles, vans, and passenger cars; Commercial Vehicle Drive and Motion Systems, which include medium duty trucks, heavy duty trucks, buses, and specialty vehicles; Off-Highway Drive and Motion Systems, which iinclude construction, earth moving, agricultural, mining, forestry, material handling, and industrial stationary; and Power Technologies, which include medium/heavy vehicle market, and off-highway market.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
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