BorgWarner (BWA) AI Stock Analysis

• Market Cap: $7.92B
• Dividend Yield: 1.22%
• Average Volume (3M): 2.36M
• Price to Earnings (P/E): 29.0
• Beta (1Y): 0.65
• Revenue Growth: -8.23%
• EPS Growth: -52.61%
• Country: US
• Employees: 38,300
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Auto - Parts
• EPS (TTM): 1.11
• Shares Outstanding: 219,720,050
• 10 Day Avg. Volume: 1,706,121
• 30 Day Avg. Volume: 2,359,088
• PEG Ratio: -2.12
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.80
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 1.59
• 1Y Price Target: $39.73
• Price Target Upside: 10.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 73 Outperform
• Price Target: $41.00 ▲(13.83%Upside)

BorgWarner's overall stock score reflects strong cash flow management, positive technical momentum, and promising growth outlook from eProducts and new business awards. However, the stock's high valuation and challenges in revenue growth and tariff impacts temper the score. Strategic focus on efficiency and growth opportunities will be crucial for future performance.

Positive Factors

Market Strategy

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

Operational Performance

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

Negative Factors

Capital Allocation

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

Future Outlook

Soft 2025 outlook slightly below 2024 and consensus.

BorgWarner Business Overview & Revenue Model

Company Description

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. The company operates through four segments: Air Management, E-Propulsion & Drivetrain, Fuel Injection, and Aftermarket. The Air Management segment offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery modules and systems, battery packs, battery heaters, and battery charging. The E-Propulsion & Drivetrain segment provides rotating electrical components, power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. The Fuel Injection segment develops and manufactures gasoline and diesel fuel injection components and systems. The Aftermarket segment sells products and services to independent aftermarket customers and original equipment service customers. This segment provides a range of solutions, including fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics. The company sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.

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

BorgWarner Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 36.02 is above the 20-day moving average (MA) of 35.13, above the 50-day MA of 33.83, and above the 200-day MA of 31.81, indicating a bullish trend. The MACD of 0.69 indicates Positive momentum. The RSI at 61.42 is Neutral, neither overbought nor oversold. The STOCH value of 67.69 is Neutral, 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
APTV	79 Outperform	$15.34B	11.67	15.52%	―	-2.47%	-43.12%
ALV	75 Outperform	$8.90B	12.82	29.99%	2.40%	-0.98%	21.64%
BWA	73 Outperform	$7.92B	28.97	5.38%	1.22%	-8.23%	-52.61%
ALSN	73 Outperform	$7.41B	10.18	50.15%	1.16%	3.86%	16.02%
LEA	73 Outperform	$5.78B	12.64	9.51%	3.10%	-3.12%	-8.23%
GNTX	66 Neutral	$5.31B	13.99	16.44%	1.75%	-1.66%	-9.20%
Sector *	63 Neutral	$17.10B	10.62	-8.48%	2.94%	1.62%	-25.72%

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.