July 5 (Bloomberg) -- Dana Holding Corp. climbed to a record, capping a week of gains for the maker of car and truck axles after an expanded stock buyback and an analyst’s upgrade of his rating on the company.
Shares of the Maumee, Ohio-based company rose 4.9 percent to $21.06 in New York, the highest closing price since Dana exited bankruptcy in 2008. Dana has surged 35 percent this year, compared with an 18 percent increase in the Russell 2000 Index.
Dana’s board approved an expanded stock buyback program of as much as $1 billion, the company said June 28. The shares climbed 5.8 percent that day. They have posted intraday gains each trading day and are headed for their fourth daily increase since the announcement. Joseph Spak, an analyst for RBC Capital Markets, upgraded Dana stock to outperform in a July 1 report, increasing his price target to $24 from $18.
“Investors are essentially being ‘paid to wait’” for a recovery in shipments of Class 8 trucks, the backbone of interstate hauling, Spak wrote in the July 1 report.
“They are clearly now utilizing their strong balance sheet to drive shareholder value,” he wrote of Dana.
The analyst also projected Dana’s 2014 profit margin before interest, taxes, depreciation and amortization of 11.7 percent, slightly lower than the company’s 12 percent target.
To contact the reporter on this story: Megan Durisin in Southfield, Michigan at email@example.com
To contact the editor responsible for this story: Bill Koenig at firstname.lastname@example.org