BorgWarner (BWA) AI Stock Analysis

• Market Cap: $5.75B
• Dividend Yield: 1.56%
• Average Volume (3M): 4.85M
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.68
• Revenue Growth: -11.11%
• EPS Growth: -46.32%
• Country: US
• Employees: 38,300
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Auto - Parts
• EPS (TTM): 1.01
• Shares Outstanding: 219,686,260
• 10 Day Avg. Volume: 3,230,591
• 30 Day Avg. Volume: 4,854,197
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.45
• Price to Cash Flow (P/CF): 2.30
• P/FCF Ratio: 2.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $35.43
• Price Target Upside: 25.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

BorgWarner's overall score reflects a stable financial foundation with strong cash flow and moderate profitability. The positive elements from the earnings call, such as margin improvements and cash flow, are offset by technical bearish signals and valuation metrics indicating the stock is fairly priced. The company's outlook is cautious due to industry headwinds, but strategic growth initiatives provide potential upside.

Positive Factors

Earnings Guidance

Management raised the full-year EPS guidance by 4% and EBIT guidance by about 1% despite lowering sales expectations.

New Business Wins

BorgWarner displayed resilience, outpacing other supplier peers with key wins awarded across 3 major regions.

Shareholder Returns

BWA repurchased $400M worth of shares year-to-date and plans to return almost 100% of 2024 free cash flow with dividends.

Negative Factors

FX Impact

A $140mn sales headwind from FX expected in 2025.

Operational Challenges

Operational headwinds are present in the PowerDrive segment related to restructuring and integration challenges.

Sales Guidance

BWA lowered its sales guidance by $150M, reflecting a decrease in production assumptions and lower mix in internal combustion engines and battery products.

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 makes money by producing and selling a wide range of automotive components and systems to original equipment manufacturers (OEMs) and aftermarket customers globally. The company's revenue model is diversified across its product lines, including powertrain products, drivetrain systems, and aftermarket services. Key revenue streams involve long-term contracts with leading automotive manufacturers for the supply of advanced propulsion technologies. Additionally, the company's focus on innovation and strategic acquisitions enhances its market position, allowing it to capitalize on the growing demand for cleaner and more energy-efficient vehicle technologies. Partnerships with major automotive brands and investments in electric and hybrid vehicle components further contribute to BorgWarner's earnings.

BorgWarner Financial Statement Overview

Summary

BorgWarner showcases a stable financial position with moderate profitability and strong cash flow generation. Despite recent revenue declines, the company maintains a balanced debt profile and healthy cash flow, suggesting resilience in operational cash management.

Income Statement

BorgWarner's revenue has shown a decline in recent years, with a 0.79% decrease from 2023 to 2024 and a 10.16% decrease from 2022 to 2023. The gross profit margin in 2024 was 18.8%, and the net profit margin was 2.4%, both indicating moderate profitability. EBIT and EBITDA margins were 3.9% and 3.9% respectively in 2024, showing operational efficiency challenges.

Balance Sheet

The company's debt-to-equity ratio was 0.75 in 2024, reflecting a moderate leverage position. Return on Equity (ROE) stood at 6.1%, which indicates moderate efficiency in generating profits from equity. The equity ratio was 39.5% in 2024, suggesting a stable balance between equity and liabilities.

Cash Flow

BorgWarner's free cash flow significantly improved from 2023 to 2024, indicating strong cash generation. The operating cash flow to net income ratio was 4.1 in 2024, reflecting strong cash flow relative to net income. The free cash flow to net income ratio was 4.1 as well, indicating robust cash flow conversion.

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
	EBIT
546.00M	1.16B	781.00M	635.00M	87.00M
	EBITDA
1.30B	1.67B	1.64B	1.69B	1.58B
	Net Income Common Stockholders
338.00M	625.00M	944.00M	537.00M	500.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.09B	1.53B	1.34B	1.84B	1.65B
	Total Assets
13.99B	14.45B	16.99B	16.57B	16.03B
	Total Debt
4.16B	3.93B	4.23B	4.33B	3.79B
	Net Debt
2.07B	2.40B	2.89B	2.49B	2.14B
	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
42.00M	-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: Neutral
• Last Price: 28.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWA, the sentiment is Neutral. The current price of 28.27 is above the 20-day moving average (MA) of 26.95, below the 50-day MA of 28.35, and below the 200-day MA of 31.84, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 54.99 is Neutral, neither overbought nor oversold. The STOCH value of 86.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BWA.

BorgWarner Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEN	73 Outperform	$508.55M	3.26	10.53%	9.15%	-9.61%	-43.91%
APTV	69 Neutral	$11.00B	6.97	17.57%	―	-1.69%	-33.56%
LEA	69 Neutral	$4.52B	9.52	10.81%	3.64%	-0.70%	-7.27%
BWA	65 Neutral	$5.75B	17.42	6.46%	1.56%	-11.11%	-46.32%
AXL	64 Neutral	$441.38M	12.97	5.79%	―	0.75%	―
Sector *	60 Neutral	$6.85B	11.57	3.09%	4.18%	2.37%	-21.38%
DAN	59 Neutral	$1.90B	―	-3.92%	3.06%	-2.57%	-248.28%

BorgWarner Corporate Events

BorgWarner Declares Quarterly Dividend Amidst Financial Results

On February 5, 2025, BorgWarner’s Board declared a quarterly dividend of $0.11 per share, payable on March 17, 2025. BorgWarner reported its 2024 financial results, highlighting a decrease in net sales and earnings but maintaining a strong cash flow. The company secured new business awards, expecting continued sales growth and a stable operating margin in 2025 despite market challenges.