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BorgWarner
(NYSE:BWA)
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Rating:71Outperform
Price Target:
$70.00
▲(25.76% Upside)
Action:Reiterated
Date:05/29/26
The score is driven primarily by improving fundamentals and strong free-cash-flow momentum, supported by clear technical uptrend signals. These positives are tempered by weak net profitability/ROE and earnings-call risks tied to battery demand headwinds and cautious macro outlook, while valuation is reasonable but the dividend is modest.
Positive Factors
Free cash flow strength
Sustained FCF of ~$1.45B indicates durable cash-generation capacity beyond cyclical revenue swings. High FCF supports reinvestment in electrification programs, targeted M&A, debt paydown and shareholder returns, enhancing strategic optionality and resilience over a multi-quarter horizon.
Negative Factors
Low net margins & depressed ROE
Weak net-margin conversion and reduced ROE signal that non-operating costs, interest, or one-time items are eroding bottom-line returns. Persistently low returns limit capacity to attract capital, reduce reinvestment efficiency and constrain long-term shareholder value creation absent sustained profitability recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained FCF of ~$1.45B indicates durable cash-generation capacity beyond cyclical revenue swings. High FCF supports reinvestment in electrification programs, targeted M&A, debt paydown and shareholder returns, enhancing strategic optionality and resilience over a multi-quarter horizon.
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
$13.03B
Dividend Yield1.24%
Average Volume (3M)3.62M
Price to Earnings (P/E)36.9
Beta (1Y)0.63
Revenue Growth2.36%
EPS Growth34.03%
CountryUS
Employees38,300
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.72
Shares Outstanding205,114,940
10 Day Avg. Volume3,185,613
30 Day Avg. Volume3,622,319
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 Cap1.26
Enterprise Value/Revenue1.15
Enterprise Value/Gross Profit6.06
Enterprise Value/Ebitda11.55
Forecast
1Y Price Target
$78.33Price Target Upside40.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)5.19
Revenue Forecast (FY)$14.23B
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:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive operational and financial picture: Q1 results showed margin expansion (50 bps), adjusted EPS growth (+12%), continued strong award activity (12 wins) and tangible progress on new industrial initiatives (turbine generator B‑samples, BESS and inverter B‑samples). Management left full‑year guidance unchanged, signaling confidence in execution though noting macro and battery demand headwinds. Key challenges include a decline in the battery segment (noted as a ~150 bps sales headwind), modest Q1 free cash flow in absolute terms, and early‑stage uncertainty around scaling the new data‑center/industrial businesses and potential supply constraints. On balance, the highlights (profitability, EPS growth, awards, clear product commercialization milestones and disciplined capital returns) outweigh the lowlights, but management retains caution given market uncertainty.Positive Updates
Quarterly Sales
Reported Q1 2026 sales of $3.5 billion; reported sales roughly flat year‑over‑year with FX tailwind of +$167 million, a battery segment headwind of -$54 million, and the remaining organic sales decline of $95 million (≈ -2.7%) in line with market production.
Negative Updates
Battery Energy Systems Decline
Battery Energy Systems segment weakness: YoY sales decline driven by reduced demand (lack of North American incentives and weaker European demand). Management expects battery decline to represent roughly a 150 basis point headwind to full‑year sales.
Read all updates
Q1-2026 Updates
Positive
Negative
Quarterly Sales
Reported Q1 2026 sales of $3.5 billion; reported sales roughly flat year‑over‑year with FX tailwind of +$167 million, a battery segment headwind of -$54 million, and the remaining organic sales decline of $95 million (≈ -2.7%) in line with market production.
Read all positive updates
Company Guidance
BorgWarner reaffirmed full‑year 2026 guidance calling for total sales of $14.0–$14.3 billion (with an assumed ~$200 million FX tailwind from a stronger euro/RMB), a 2026 organic sales decline of roughly 3.5% to 1.5% year‑over‑year (battery sales expected to be a ~150‑bp headwind) and weighted end markets flat to down ~3% (light‑vehicle >80% of sales); full‑year adjusted operating margin is forecast at 10.7%–10.9% (2025: 10.7%)—including ~10 bps benefit from the exit of the charging business—and contemplates decremental conversion ranging from low‑double‑digits at the low end to mid‑teens depending on cost actions; adjusted EPS is guided to $5.00–$5.20 per diluted share (midpoint ≈ +4% vs. 2025 adjusted EPS) and free cash flow to $900 million–$1.1 billion.BorgWarner Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
64
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 14.33B | 14.32B | 14.08B | 14.20B | 12.63B | 14.84B |
| Gross Profit | 2.71B | 2.67B | 2.61B | 2.57B | 2.37B | 2.86B |
| EBITDA | 1.42B | 1.34B | 1.32B | 1.67B | 1.56B | 1.69B |
| Net Income | 362.00M | 277.00M | 338.00M | 625.00M | 944.00M | 537.00M |
Balance Sheet | ||||||
| Total Assets | 13.65B | 13.77B | 13.99B | 14.45B | 16.99B | 16.57B |
| Cash, Cash Equivalents and Short-Term Investments | 2.11B | 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 | 8.01B | 8.15B | 8.29B | 8.39B | 9.49B | 9.31B |
| Stockholders Equity | 5.48B | 5.44B | 5.53B | 5.83B | 7.22B | 6.95B |
Cash Flow | ||||||
| Free Cash Flow | 1.23B | 1.18B | 681.00M | 477.00M | 948.00M | 638.00M |
| Operating Cash Flow | 1.72B | 1.65B | 1.35B | 1.31B | 1.57B | 1.31B |
| Investing Cash Flow | -404.00M | -368.00M | -603.00M | -694.00M | -1.48B | -1.43B |
| Financing Cash Flow | -937.00M | -1.12B | -167.00M | -419.00M | -511.00M | 319.00M |
BorgWarner Technical Analysis
Neutral
55.66
Price Trends
65.89
Negative
60.51
Positive
52.55
Positive
Market Momentum
-0.60
Positive
38.20
Neutral
6.28
Positive
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 55.66 is below the 20-day moving average (MA) of 70.84, below the 50-day MA of 65.89, and above the 200-day MA of 52.55, indicating a neutral trend. The MACD of -0.60 indicates Positive momentum. The RSI at 38.20 is Neutral, neither overbought nor oversold. The STOCH value of 6.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.55B | 12.97 | 10.41% | 2.63% | 2.86% | 17.30% | |
72 Outperform | $8.85B | 12.46 | 27.78% | 2.60% | 6.14% | 7.30% | |
71 Outperform | $13.03B | 36.93 | 6.34% | 1.24% | 2.36% | 34.03% | |
64 Neutral | $9.65B | 18.01 | 29.49% | 1.07% | 13.99% | -25.70% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $12.46B | 35.05 | 3.90% | ― | 5.20% | -71.83% | |
52 Neutral | $2.68B | -18.32 | -12.67% | 1.70% | -23.37% | -131.29% |
* Consumer Cyclical Sector Average
BWA
BorgWarner
63.52
29.14
84.76%
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116.37
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23.82%
ALV
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116.24
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DAN
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24.91
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44.92%
APTV
Aptiv
58.89
-2.13
-3.49%
LEA
Lear
130.85
30.77
30.74%
BorgWarner Corporate Events
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...
Business Operations and StrategyExecutive/Board ChangesDividendsShareholder Meetings
BorgWarner Shareholders Approve Amended Stock Incentive Plan
Positive
Apr 30, 2026
At its April 29, 2026 annual meeting, BorgWarner shareholders approved an amended and restated 2023 Stock Incentive Plan, adding 8.3 million shares of common stock available for equity awards. Investors also elected eight directors, backed executi...
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.