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BorgWarner Inc. (BWA) is a global automotive supplier with a market cap of $7.38 billion. Headquartered in Auburn Hills, Michigan, BorgWarner is dedicated to advancing mobility by providing innovative and sustainable solutions for the automotive industry. The company offers a diverse portfolio of products, including propulsion systems, drivetrain components, and electric vehicle technologies. With operations spanning multiple countries, BorgWarner plays a critical role in shaping the future of transportation worldwide.
BorgWarner has significantly underperformed the broader market over the last year. The stock has declined 25.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. In 2024 alone, the stock has lost 11.1%, compared to SPX's 9.9% gains on a YTD basis.
Zooming in further, BWA has underperformed the Consumer Discretionary Select Sector SPDR Fund (XLY) over the past year. The exchange-traded fund has gained marginally over this period. Also, the stock's loss on a YTD basis is much higher than the exchange-traded fund's 3.2% decline over the same time frame.
On Jul. 31, BWA’s shares gained more than 8% following the release of its Q2 earnings report. The company surpassed earnings estimates but missed revenue estimates. The company anticipates full-year earnings from $3.95 to $4.15 per share and revenue from $14.1 billion to $14.4 billion.
For the current fiscal year, ending in December 2024, analysts expect BWA’s EPS to grow 8.5% to $4.07 on a diluted basis. However, the company’s earnings surprise history is mixed. It exceeded the consensus estimate in three of the last four quarters while missing on one other occasion.
Among the 15 analysts covering BWA stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings and six “Holds.”
On Aug. 1, Dan Levy from Barclays maintained a “Buy” rating on BorgWarner, with a price target of $47, which indicates a 47.5% upside from the current levels.
The mean price target of $41.07 represents a 28.9% upside to BWA’s current price levels. The Street-high price target of $50 suggests an ambitious upside potential of 56.9%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
