Dana Incorporated (NYSE:DAN) shares were trading lower on Thursday morning after the company announced a deal to combine with Eaton Corporation plc‘s (NYSE:ETN) Mobility business in a Reverse Morris Trust transaction.
Meanwhile, Eaton shares rose as investors weighed its Mobility separation and a sharper focus on its Electrical and Aerospace businesses.
Dana And Eaton Mobility Deal
The transaction values Eaton's Mobility Group at approximately $5.1 billion and creates a combined company with an enterprise value of over $10 billion.
Eaton shareholders will own at least 50.1% of the combined company, while Dana shareholders will own approximately 49.9% at closing.
Eaton will also receive an approximately $1.1 billion cash distribution, subject to adjustments.
Financial Outlook And Synergies
The combined company is expected to generate approximately $11 billion in pro forma 2026 sales and $1.7 billion in pro forma adjusted EBITDA, including run-rate synergies.
The companies expect $250M in annual run-rate synergies within 24 months after closing. Reduced costs, purchasing scale, manufacturing optimization, and engineering efficiencies will drive these synergies.
Dana said the combination expands its 2030 strategy, raising its targets to $14 billion to $15 billion in sales, approximately 18% adjusted EBITDA margins, and an 8% to 9% adjusted free cash flow margin.
What The Combined Company Will Do
The combination will bring together Dana's powertrain, thermal, and sealing technologies with Eaton Mobility's commercial vehicle transmissions, engine and emissions products, and electrification capabilities.
The combined company will operate as Dana Incorporated and remain listed on the NYSE under the ticker symbol DAN.
For Eaton, the transaction advances its portfolio transformation and increases its focus on higher-growth Electrical and Aerospace businesses.
Eaton expects the separation to be immediately accretive to its organic growth rate and operating margins upon closing.
DAN Technical Analysis: Trend, Momentum And Key Levels
The stock has shown a strong performance over the past year, with a 12-month increase of 100.28%.
The RSI is 51.01, signaling neutral momentum and showing the stock is neither overbought nor oversold.
This neutral RSI level reflects a balanced market sentiment, which may be influenced by the recent merger announcement.
- Key Resistance: $37.50 — a nearby level where rebounds can stall, closely tied to recent pivot zones.
- Key Support: $31.00 — a level where buyers previously stepped in, aligning with the 52-week low zone.
DAN Earnings Preview And Analyst Price Targets
Dana will provide its next financial update on August 4, 2026 (estimated).
- EPS Estimate: 66 cents (Up from a loss of 11 cents)
- Revenue Estimate: $1.91 billion (Down from $1.94 billion)
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $40.80. Recent analyst moves include:
- Wells Fargo: Equal-Weight (Raises Target to $36.00) (April 30)
- JP Morgan: Overweight (Raises Target to $45.00) (April 23)
- UBS: Buy (Raises Target to $42.00) (April 14)
Stock Price Activity: Dana shares were down 14.89% at $30.19 and Eaton Corp shares were up 1.21% at $380.01 at the time of publication on Thursday, according to Benzinga Pro data.
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