Dana: Past The Worst On Costs, But Volumes In 2023 Are The Next Worry

This has been an interesting year for Dana (NYSE:DAN). This large supplier of driveline, thermal, and sealing products to the passenger vehicle, commercial vehicle, and off-highway markets has done well on revenue, boosted by strong commercial truck and off-highway equipment demand, but has been hit hard by input cost inflation and unrecoverable costs tied to erratic production schedules at their OEM partners.

With all that, the shares are down about 10% since my last update; not terrible relative to the market, but also not all that exceptional relative to the sector. Looking ahead, Dana should see some cost-related tailwinds in 2023, but will also likely see growing headwinds from weaker commercial and off-highway markets. Even with those concerns, I believe Dana is an undervalued play on long-term commercial vehicle electrification and margin recovery across its segments.

 

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Dana: Past The Worst On Costs, But Volumes In 2023 Are The Next Worry