BWS keeps bullish $17 target on Dauch despite sharp share decline
Dauch closed at $5.79 on Oct. 7, down 36% from its February high, while BWS Financial reiterated a Buy rating and $17 target. The Dowlais acquisition nearly doubled quarterly sales but also increased interest expense, and General Motors' pickup changeover is expected to reduce production. Analysts forecast normalized EPS rising to $1.48 by fiscal 2028, though the consensus target is $9.
Dauch’s February peak arrived just after it completed the Dowlais deal. In fiscal 2026’s second quarter, revenue rose to $2.96 billion from $1.54 billion, while interest costs climbed to $89.8 million from $43.1 million. First-half restructuring and deal expenses totaled $148.7 million, producing a $99.3 million loss.
Shares touched $5.09 on July 8. CFO Chris May later flagged GM pickup-launch downtime from September. Jefferies downgraded to Hold on Sept. 22. UBS cut its target to $8 from $9, TD Cowen stood at $10, and consensus was $9. Dauch carried $5.03 billion of long-term debt at June 30.
Dauch’s situation may affect more than shareholders. If GM’s pickup changeover reduces orders, workers at Dauch plants and its suppliers could see slower schedules or temporary layoffs. Creditors and investors may watch leverage and valuation uncertainty closely. Consumers might eventually feel changes in vehicle availability or pricing if supplier disruptions spread, though the immediate impact is likely concentrated in auto-industry employment and regional manufacturing communities.