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BorgWarner
(NYSE:BWA)
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Rating:68Neutral
Price Target:
$76.00
▲(19.35% Upside)
Action:Reiterated
Date:08/11/26
BWA scores as moderately attractive primarily on improving financial trajectory and strong cash generation, reinforced by a constructive earnings call (raised EPS guidance, robust free cash flow, and sizable buybacks). Technicals also support the view with an uptrend versus major moving averages. The main constraint on the score is valuation (high P/E with a low dividend yield) alongside ongoing organic sales and BES-related headwinds.
Positive Factors
Free cash flow strength
Sustained free cash flow growth and strong operating cash generation provide durable financial flexibility to fund capex, R&D, debt paydown and buybacks. This improves resilience through auto cycles and underpins shareholder returns while supporting strategic electrification investments.
Negative Factors
BES headwind & losses
Battery Energy Systems remains a drag with modest profitability and market incentive sensitivity. Persistent weakness or slow scale-up in BES can continue to erode reported sales and margins, requiring sustained investment and time to reach break-even or meaningful contribution to earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained free cash flow growth and strong operating cash generation provide durable financial flexibility to fund capex, R&D, debt paydown and buybacks. This improves resilience through auto cycles and underpins shareholder returns while supporting strategic electrification investments.
Read all positive factors
BorgWarner Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyBorgWarner (BWA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.98B
Dividend Yield0.99%
Average Volume (3M)2.46M
Price to Earnings (P/E)34.3
Beta (1Y)0.68
Revenue Growth2.17%
EPS Growth111.19%
CountryUS
Employees37,500
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.00
Shares Outstanding203,666,350
10 Day Avg. Volume2,173,373
30 Day Avg. Volume2,464,170
Financial Highlights & Ratios
PEG Ratio-2.31
Price to Book (P/B)1.79
Price to Sales (P/S)0.68
P/FCF Ratio8.27
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$80.60Price Target Upside26.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)5.21
Revenue Forecast (FY)$14.20B
BorgWarner Business Overview & Revenue Model
Company Description
BorgWarner Inc. (BWA) is a prominent global supplier of advanced propulsion technologies, catering to a wide spectrum of vehicles including those powered by internal combustion engines, hybrids, and fully electric drivetrains. The company's operat...
How the Company Makes Money
BorgWarner primarily makes money by supplying engineered components and systems to automotive OEM customers under production supply contracts and platform awards tied to specific vehicle programs. Revenue is largely generated from (1) high-volume ...
BorgWarner Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call highlighted strong operational execution: flat reported sales with modest organic growth excluding BES, 100 basis points of adjusted margin expansion, 17% adjusted EPS growth, robust free cash flow and an enlarged share buyback authorization. Management reinforced progress on strategic industrial initiatives (turbine generator, BESS, inverters) with several product milestones and seven new awards, and raised R&D to accelerate these opportunities. Offsetting this optimism are near-term headwinds from the Battery Energy Systems segment, an expected organic sales decline for the year (-3.5% to -1.5%), decremental conversion risk on lower volumes, and timing/scale risks for industrial market ramps. Overall, the positive financial execution, cash return actions and tangible industrial progress materially outweigh the headwinds.Positive Updates
Solid top-line and organic performance
Q2 sales of over $3.6 billion; organic net sales excluding the Battery Energy Systems (BES) decline were up modestly year-over-year (organic increase of $18 million, ~0.5%), modestly outperforming the decline in light-vehicle market production.
Negative Updates
Battery Energy Systems (BES) headwind
BES drove a year-over-year Q2 sales decrease of ~$62 million and is expected to cause roughly a 170 basis point headwind to full-year sales due to weak North American incentives and weaker European demand. BES only modestly profitable to-date (H1 losses reported ~ $4M before other offsets) despite restructuring actions.
Read all updates
Q2-2026 Updates
Positive
Negative
Solid top-line and organic performance
Q2 sales of over $3.6 billion; organic net sales excluding the Battery Energy Systems (BES) decline were up modestly year-over-year (organic increase of $18 million, ~0.5%), modestly outperforming the decline in light-vehicle market production.
Read all positive updates
Company Guidance
BorgWarner maintained 2026 guidance for sales of $14.0–$14.3 billion (vs $14.3B in 2025) while forecasting full‑year adjusted operating margin of 10.7%–10.9% (2025: 10.7%) and raising adjusted EPS to $5.05–$5.30 per diluted share (up from $5.00–$5.20), with the midpoint EPS implying ~5% growth versus 2025; full‑year free cash flow is guided to $900 million–$1.1 billion (midpoint ~$1.0B). The company expects an FX tailwind of about $175 million, weighted end markets to be flat to down 3%, organic sales to be down 3.5% to down 1.5% (with the battery business ~170 bps headwind and light‑vehicle sales ~80% of total), and noted the exit of the charging business adds ~10 bps to margin; management also plans an incremental $10–$15 million of industrial R&D in H2 while continuing significant share repurchases (≈$650M repurchased over the past four quarters, Q2 repurchases ≈$100M, and Board authorization increased by $1.0B to $1.35B, ≈10% of market cap).BorgWarner Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
66
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 14.34B | 14.32B | 14.08B | 14.20B | 12.63B | 14.84B |
| Gross Profit | 2.79B | 2.67B | 2.61B | 2.57B | 2.37B | 2.86B |
| EBITDA | 1.32B | 1.34B | 1.32B | 1.67B | 1.56B | 1.69B |
| Net Income | 415.00M | 277.00M | 338.00M | 625.00M | 944.00M | 537.00M |
Balance Sheet | ||||||
| Total Assets | 13.93B | 13.77B | 13.99B | 14.45B | 16.99B | 16.57B |
| Cash, Cash Equivalents and Short-Term Investments | 2.45B | 2.31B | 2.09B | 1.53B | 1.08B | 1.84B |
| Total Debt | 4.07B | 4.18B | 4.34B | 3.93B | 4.31B | 4.52B |
| Total Liabilities | 8.14B | 8.15B | 8.29B | 8.39B | 9.49B | 9.31B |
| Stockholders Equity | 5.62B | 5.44B | 5.53B | 5.83B | 7.22B | 6.95B |
Cash Flow | ||||||
| Free Cash Flow | 1.21B | 1.18B | 681.00M | 477.00M | 948.00M | 638.00M |
| Operating Cash Flow | 1.73B | 1.65B | 1.35B | 1.31B | 1.57B | 1.31B |
| Investing Cash Flow | -435.00M | -368.00M | -603.00M | -694.00M | -1.48B | -1.43B |
| Financing Cash Flow | -878.00M | -1.12B | -167.00M | -419.00M | -511.00M | 319.00M |
BorgWarner Technical Analysis
Positive
63.68
Price Trends
67.29
Positive
63.23
Positive
55.85
Positive
Market Momentum
0.90
Negative
58.70
Neutral
75.93
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 63.68 is below the 20-day moving average (MA) of 65.36, below the 50-day MA of 67.29, and above the 200-day MA of 55.85, indicating a bullish trend. The MACD of 0.90 indicates Negative momentum. The RSI at 58.70 is Neutral, neither overbought nor oversold. The STOCH value of 75.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BWA.
BorgWarner Risk Analysis
BorgWarner disclosed 37 risk factors in its most recent earnings report. BorgWarner reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
BorgWarner Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.94B | 14.32 | 25.10% | 2.94% | 5.89% | -7.00% | |
68 Neutral | $13.98B | 34.33 | 7.37% | 1.06% | 2.17% | 111.19% | |
67 Neutral | $6.16B | 11.60 | 10.90% | 2.14% | 3.55% | 25.67% | |
66 Neutral | $10.39B | 19.85 | 27.88% | 0.92% | 37.56% | -28.71% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $3.26B | -18.97 | -13.31% | 1.63% | -15.78% | -384.04% | |
53 Neutral | $10.29B | 47.20 | 2.41% | ― | 5.20% | -71.83% |
* Consumer Cyclical Sector Average
BWA
BorgWarner
68.66
27.51
66.85%
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APTV
Aptiv
49.56
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LEA
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124.95
25.02
25.04%
BorgWarner Corporate Events
Business Operations and StrategyPrivate Placements and Financing
BorgWarner Announces Debt Tender Offers and Redemption Plan
Positive
Aug 10, 2026
On August 10, 2026, BorgWarner Inc. launched cash tender offers for any and all of its 7.125% Senior Notes due 2029, along with up to $720 million of several other series of senior notes maturing between 2027 and 2045. The offers use a waterfall s...
Business Operations and StrategyExecutive/Board ChangesDividends
BorgWarner Adds Independent Director, Maintains Quarterly Dividend
Positive
Jul 31, 2026
On July 30, 2026, BorgWarner’s board expanded from eight to nine members and appointed former Deere Company executive Rajesh Kalathur as an independent director, with his compensation set under the company’s standard non‑employe...
Business Operations and StrategyExecutive/Board Changes
BorgWarner Names Stefan Demmerle to Key Technology Role
Positive
May 28, 2026
On May 26, 2026, BorgWarner Inc. announced the appointment of Stefan Demmerle as Vice President of BorgWarner Inc., President and General Manager of Battery Energy Systems, and Chief Technology Officer, effective July 1, 2026. Demmerle has led Bor...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.