Why Dana (DAN) Is Rising Today

NEW YORK (TheStreet) -- Dana Holding (DAN) rose 6.7% to $20.09 Tuesday after it announced preliminary 2013 revenue that was slightly above analysts' estimates.

The auto parts maker said it expects 2013 revenue of about $6.77 billion. Capital IQ Consensus Estimate expected revenue of $6.74 billion for the company in 2013. Dana Holding cut its guidance in October.

The company issued guidance for 2014 that sees earnings per share of between $1.82 and $1.90 and revenue of between $6.8 billion and $6.9 billion. Current estimates call for earnings of $1.90 a share and 2014 revenue for Dana of $6.74 billion. 

TheStreet Ratings team rates DANA HOLDING CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about its recommendation:

"We rate DANA HOLDING CORP (DAN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DAN's share price has surged by 26.42% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • DANA HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DANA HOLDING CORP increased its bottom line by earning $1.40 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.40).
  • DAN, with its decline in revenue, underperformed when compared the industry average of 10.7%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $106.00 million or 18.46% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Auto Components industry and the overall market, DANA HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: DAN Ratings Report

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