BorgWarner (BWA) AI Stock Analysis

• Market Cap: $11.59B
• Dividend Yield: 1.24%
• Average Volume (3M): 3.44M
• Price to Earnings (P/E): 45.0
• Beta (1Y): 0.63
• Revenue Growth: 0.08%
• EPS Growth: -83.69%
• Country: US
• Employees: 38,300
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 1.35
• Shares Outstanding: 207,048,770
• 10 Day Avg. Volume: 3,662,342
• 30 Day Avg. Volume: 3,437,349
• PEG Ratio: -2.31
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 8.27
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 0.94
• Enterprise Value/Gross Profit: 5.02
• Enterprise Value/Ebitda: 6.81
• 1Y Price Target: $68.00
• Price Target Upside: 21.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 5.19
• Revenue Forecast (FY): $14.28B

• Rating: 62 Neutral
• Price Target: $61.00 ▲(8.97% Upside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is driven by strong cash flow and a manageable balance sheet, but held back by significant margin/return compression and an expensive valuation (high P/E). Technically, the uptrend is intact, though overbought signals add near-term risk; earnings guidance supports margin/EPS resilience but also points to organic sales and battery-demand headwinds.

Positive Factors

Free Cash Flow Strength

Meaningful FCF improvement to $1.65B in 2025 demonstrates strong cash generation capacity. Durable cash conversion supports capital allocation flexibility—funding R&D, capex for new product ramps, and shareholder returns—providing resilience through automotive cycles and funding strategic pivots.

Manageable Leverage / Balance Sheet

Moderate leverage and slightly lower total debt in 2025 signal financial flexibility. A balanced capital structure enables continued investment in EV and new-market programs, supports buybacks/dividends and reduces refinancing risk, preserving ability to endure cyclical demand shocks.

Strategic New-Market Turbine Generator Win

The turbine-generator program diversifies revenue beyond automotive into data centers/microgrids. Expected >$300M first-year revenue and mid-teens incremental conversion, plus ~65% content control and use of existing manufacturing, provide a durable growth and margin-accretive avenue over the medium term.

Negative Factors

Multi-year Margin Compression

Sustained margin erosion over several years reflects weakening profitability and rising earnings-quality risk. Even with gross margins steady, pressures below gross profit (cost structure, other charges) materially reduce ROE and limit the firm's ability to reinvest or sustain cash returns absent structural expense or mix improvements.

Sharp Battery Systems Revenue Decline

A 35–40% drop in battery-systems revenue is a structural headwind given EV supply-chain shifts and weaker incentives outside China. Prolonged weakness in this segment can depress overall top-line growth and underutilize EV-related capacities, making recovery timing and revenue replacement a key multi-quarter risk.

Guided Organic Sales Contraction & FCF Pressure

Management's 2026 guidance implies modest organic contraction and a lower FCF midpoint due to higher capex to support new programs. Elevated capex and weaker organic demand reduce near-term free cash available for buybacks/dividends and raise execution risk if new-market ramps or demand recovery are delayed.

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 primarily through the sale of its automotive components and systems. Key revenue streams include the supply of turbochargers, electric and hybrid vehicle technologies, and transmission systems to original equipment manufacturers (OEMs) in the automotive industry. The company also earns revenue from aftermarket products and services, which provide maintenance and replacement parts for vehicles. Significant partnerships with major automakers and ongoing investments in research and development for innovative propulsion solutions further enhance its market position and contribute to its earnings. Additionally, the transition towards electrification and sustainability in the automotive sector presents growth opportunities for BorgWarner, allowing it to capitalize on emerging trends and technologies.

BorgWarner Financial Statement Overview

Summary

Cash generation is a key strength (free cash flow surged in 2025), and leverage remains manageable. Offsetting this, profitability has deteriorated materially with multi-year margin and ROE compression, raising near-term earnings quality risk despite stable revenue.

Income Statement

Revenue has been broadly stable the last few years (2025 up slightly after a flat 2024 and a stronger 2023), but profitability has weakened meaningfully. Net margin compressed from ~7.5% (2022) to ~4.4% (2023), ~2.4% (2024), and ~1.9% (2025), with EBITDA margin also stepping down sharply versus prior years. Gross margin has held fairly steady (~18–19%), suggesting the main pressure is below gross profit (cost structure/other charges), which is a key near-term earnings risk.

Balance Sheet

Leverage looks manageable for the group, with debt-to-equity in a moderate range (~0.60–0.79) and total debt slightly lower in 2025 versus 2024. However, the balance sheet has become less cushioned over time as equity has trended down from 2022 levels, and returns on equity have fallen sharply (from ~13% in 2022 to ~5% in 2025), reflecting lower profitability rather than improving capital efficiency.

Cash Flow

Cash generation is a clear strength: operating cash flow increased in 2025 and free cash flow surged to $1.65B (well above 2024’s $0.68B and 2023’s $0.48B). Free cash flow conversion improved substantially versus the prior two years, indicating better cash realization even as accounting earnings declined. The main watch-out is volatility in year-to-year free cash flow (large swings across 2022–2025), which can complicate forecasting.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	14.32B	14.08B	14.20B	12.63B	14.84B
Gross Profit	2.68B	2.61B	2.57B	2.37B	2.86B
EBITDA	2.10B	1.32B	1.67B	1.56B	1.69B
Net Income	277.00M	338.00M	625.00M	944.00M	537.00M
Balance Sheet
Total Assets	13.77B	13.99B	14.45B	16.99B	16.57B
Cash, Cash Equivalents and Short-Term Investments	2.31B	2.09B	1.53B	1.08B	1.84B
Total Debt	4.18B	4.34B	3.93B	4.31B	4.52B
Total Liabilities	8.15B	8.29B	8.39B	9.49B	9.31B
Stockholders Equity	5.44B	5.53B	5.83B	7.22B	6.95B
Cash Flow
Free Cash Flow	1.18B	681.00M	477.00M	948.00M	638.00M
Operating Cash Flow	1.65B	1.35B	1.31B	1.57B	1.31B
Investing Cash Flow	-368.00M	-603.00M	-694.00M	-1.48B	-1.43B
Financing Cash Flow	-1.12B	-167.00M	-419.00M	-511.00M	319.00M

BorgWarner Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 55.98 is below the 20-day moving average (MA) of 57.01, above the 50-day MA of 50.91, and above the 200-day MA of 42.30, indicating a neutral trend. The MACD of 2.23 indicates Positive momentum. The RSI at 51.71 is Neutral, neither overbought nor oversold. The STOCH value of 3.44 is Positive, 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	74 Outperform	$10.51B	17.10	35.42%	1.07%	-4.21%	-0.45%
LEA	72 Outperform	$6.47B	16.10	9.21%	2.63%	-1.90%	-13.86%
ALV	71 Outperform	$8.74B	12.40	30.32%	2.60%	0.84%	26.17%
BWA	62 Neutral	$11.59B	44.98	5.05%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	59 Neutral	$3.77B	53.85	-2.12%	1.70%	-18.23%	―
APTV	58 Neutral	$15.42B	57.54	3.25%	―	2.16%	-85.91%

BorgWarner Corporate Events

BorgWarner Declares Quarterly Dividend, Signals Ongoing Shareholder Returns

On February 4, 2026, BorgWarner’s board of directors declared a quarterly cash dividend of $0.17 per share on its common stock, reinforcing its ongoing capital return program to shareholders. The dividend, payable on March 16, 2026 to stockholders of record as of March 2, 2026, underscores the company’s confidence in its financial position and its commitment to providing regular income to investors, while it continues to position itself as a key sustainable mobility technology provider in the global automotive sector.

The most recent analyst rating on (BWA) stock is a Hold with a $49.00 price target. To see the full list of analyst forecasts on BorgWarner stock, see the BWA Stock Forecast page.