BorgWarner Earnings: Results and New 2024 Guidance Disappoint

Narrow-moat BorgWarner reported fourth-quarter 2023 EPS before special items of $0.90, $0.05 lower than the $0.95 FactSet consensus and $0.04 shy of the prior year. Revenue, pro forma for the spinoff of Phinia, rose by 6% to $3.5 billion from $3.3 billion a year ago but, excluding currency, acquisitions, and discontinued operations, organic revenue rose 4%, 5 percentage points less than a 9% increase in global light-vehicle production on new business, but offset by the United Auto Workers strike and delayed electric vehicle launches. The 5-star-rated shares of BorgWarner currently trade at a compelling 56% discount to our unchanged $72 fair value estimate.