BorgWarner (BWA) AI Stock Analysis

• Market Cap: $7.81B
• Dividend Yield: 1.24%
• Average Volume (3M): 2.69M
• Price to Earnings (P/E): 28.6
• Beta (1Y): 0.62
• Revenue Growth: -8.23%
• EPS Growth: -52.61%
• Country: US
• Employees: 38,300
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Auto - Parts
• EPS (TTM): 1.11
• Shares Outstanding: 219,720,050
• 10 Day Avg. Volume: 2,769,574
• 30 Day Avg. Volume: 2,685,034
• PEG Ratio: -1.97
• Price to Book (P/B): 1.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.26
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: 1.51
• 1Y Price Target: $37.73
• Price Target Upside: 6.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 76 Outperform
• Price Target: $37.00 ▲(4.11%Upside)

BorgWarner's stock score is driven by strong technical momentum and a stable financial foundation, particularly in cash flow management and balance sheet stability. The high P/E ratio suggests a need for future earnings growth to justify the current valuation. Positive sentiment from the latest earnings call highlights strong eProduct sales and operational improvements, though challenges remain in managing tariffs and business restructuring. Overall, BorgWarner presents a robust investment opportunity, provided it can sustain its growth trajectory and manage external headwinds.

Positive Factors

Growth and Market Position

BWA is highlighted as one of the best auto suppliers based on growth, margins, balance sheet, and valuation.

Strategy and Innovation

BWA's strategy includes a strong ICE portfolio and a significant content opportunity on BEV, with inverter and eHeater products leading the market.

Negative Factors

Capital Allocation

Investors criticize BWA for being a poor capital allocator, citing overpayments for technology acquisitions.

Financial Outlook

Soft 2025 outlook slightly below 2024 and consensus.

BorgWarner Business Overview & Revenue Model

Company Description

BorgWarner Inc. is a global leader in providing innovative and sustainable mobility solutions for the automotive industry. The company is primarily involved in the design, manufacture, and sale of technologies for combustion, hybrid, and electric vehicles. BorgWarner operates in key sectors such as propulsion, drivetrain, and thermal management systems, serving both original equipment manufacturers (OEMs) and the aftermarket segment. With a strong focus on advancing electric and hybrid vehicle technology, BorgWarner is at the forefront of driving the transition towards cleaner and more efficient transportation solutions.

How the Company Makes Money

BorgWarner generates revenue through the sale of its diverse range of automotive components and systems. The company's key revenue streams include the production and supply of propulsion systems, including turbochargers, emissions systems, and electric propulsion components such as eMotors and power electronics. BorgWarner also earns from drivetrain products, including transmission and all-wheel drive systems, as well as from thermal management solutions that enhance vehicle efficiency and performance. Additionally, BorgWarner capitalizes on a robust aftermarket business, supplying replacement parts and services. Significant partnerships with automotive OEMs and a strategic focus on electric vehicle technologies further bolster the company's revenue by aligning with the industry's shift towards sustainable mobility.

BorgWarner Financial Statement Overview

Summary

BorgWarner exhibits a solid financial foundation with strengths in cash flow management and a stable balance sheet. However, the company faces challenges in revenue growth and profitability, as reflected in its income statement. Maintaining operational efficiency while focusing on strategic growth opportunities will be key for BorgWarner to enhance its financial performance in the competitive Auto - Parts industry.

Income Statement

The income statement shows a moderate performance for BorgWarner in the Auto - Parts industry. The TTM (Trailing-Twelve-Months) gross profit margin stands at 18.87%, indicating decent efficiency in controlling production costs. However, the net profit margin is relatively low at 2.06%, reflecting challenges in converting revenue into profit. Revenue has seen a decline when compared to previous years, with a TTM revenue of $14.01 billion, down from $14.19 billion the previous year, indicating a need for growth stimulation. Despite this, the EBIT and EBITDA margins of 3.82% and 9.16%, respectively, suggest stable operational efficiency. Overall, while operational efficiency is maintained, revenue growth and profitability need improvement.

Balance Sheet

BorgWarner's balance sheet demonstrates a stable financial position. The debt-to-equity ratio is 0.71, indicating a balanced approach to leveraging debt while maintaining solvency. The company's equity ratio is 41.35%, showing strong equity financing relative to total assets. The return on equity (ROE) is 5.05%, which is moderate but could be improved to enhance shareholder value. The overall balance sheet strength is solid, though there is room for increasing profitability.

Cash Flow

The cash flow statement reflects a strong cash generation capability, with a TTM free cash flow of $992 million, marking substantial growth from the previous period's $729 million. The operating cash flow to net income ratio is robust at 5.45, indicating efficient conversion of net income into cash. Additionally, the free cash flow to net income ratio of 3.43 further highlights the company's ability to generate cash beyond its net earnings, providing financial flexibility. Overall, BorgWarner's cash flow management is commendable, supporting its operational and strategic initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.01B	14.09B	14.20B	15.80B	14.84B	10.16B
Gross Profit	2.64B	2.65B	2.57B	3.10B	2.85B	1.91B
EBITDA	1.28B	1.32B	1.67B	1.64B	1.69B	1.58B
Net Income	289.00M	338.00M	625.00M	944.00M	537.00M	500.00M
Balance Sheet
Total Assets	13.83B	13.99B	14.45B	16.99B	16.57B	16.03B
Cash, Cash Equivalents and Short-Term Investments	1.71B	2.09B	1.53B	1.34B	1.84B	1.65B
Total Debt	4.04B	4.34B	3.93B	4.23B	4.33B	3.79B
Total Liabilities	7.94B	8.29B	8.39B	9.49B	9.31B	9.28B
Stockholders Equity	5.72B	5.53B	5.83B	7.22B	6.95B	6.46B
Cash Flow
Free Cash Flow	992.00M	729.00M	565.00M	846.00M	638.00M	723.00M
Operating Cash Flow	1.57B	1.38B	1.40B	1.57B	1.31B	1.22B
Investing Cash Flow	-522.00M	-603.00M	-593.00M	-1.42B	-1.40B	-906.00M
Financing Cash Flow	-381.00M	-167.00M	-521.00M	-567.00M	286.00M	437.00M

BorgWarner Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWA, the sentiment is Positive. The current price of 35.54 is above the 20-day moving average (MA) of 33.29, above the 50-day MA of 31.94, and above the 200-day MA of 31.71, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 70.26 is Negative, neither overbought nor oversold. The STOCH value of 88.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BWA.

BorgWarner Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALSN	80 Outperform	$8.25B	11.33	50.15%	1.10%	3.86%	16.02%
APTV	79 Outperform	$15.80B	12.02	15.52%	―	-2.47%	-43.12%
BWA	76 Outperform	$7.81B	28.58	5.38%	1.24%	-8.23%	-52.61%
LEA	75 Outperform	$5.52B	12.10	10.00%	2.98%	-3.15%	-6.70%
ALV	75 Outperform	$9.15B	13.63	28.71%	2.37%	-2.29%	35.00%
GNTX	66 Neutral	$5.20B	13.56	15.90%	2.07%	-1.66%	-9.20%
Sector *	62 Neutral	$16.85B	11.50	-7.38%	2.96%	1.59%	-23.36%

BorgWarner Corporate Events

BorgWarner Elects Directors and Approves Compensation

At the Annual Meeting on April 30, 2025, BorgWarner‘s stockholders elected eight directors to the Board and approved executive compensation and the selection of PricewaterhouseCoopers LLP as the independent auditor for 2025. A proposal to remove the one-year holding requirement for calling special meetings was rejected. Additionally, the Board declared a quarterly cash dividend of $0.11 per share, payable on June 16, 2025, to stockholders of record on June 2, 2025.