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BorgWarner Inc BWA

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Stock XNYS Rating as of
$32.90 −0.14 (0.42%)
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Company Report

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BorgWarner Earnings: Solid Results but Uncertainty Over Electric Vehicle Outlook Hits Stock Price

Richard Hilgert

Narrow-moat-rated BorgWarner reported third-quarter earnings per share before special items of $0.98, $0.04 better than the $0.94 FactSet consensus and $0.18 above last year. Revenue declined by 11% to $3.6 billion from $4.1 billion a year ago but, excluding currency, acquisitions, and discontinued operations, organic revenue rose 11%, 5 percentage points better than a 6% increase in global light-vehicle production, weighted to BorgWarner's customer base, on new business and customer cost recoveries.

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Price vs Fair Value

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BWA is trading at a 54% discount.
Price
$32.90
Fair Value
$21.00
Uncertainty
High
1-Star Price
$144.80
5-Star Price
$39.60
Economic Moat
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Capital Allocation
Vflqjpmk

Bulls Say, Bears Say

Bulls

Global clean air legislation enables BorgWarner's top-line growth to exceed worldwide growth in demand for light vehicles.

Bears

BorgWarner customers possess pricing leverage but may be more restrained in the exercise of that power, given suppliers' greater degree of customer diversity. However, contractual annual price reductions will continue to be the industry norm.

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Trading Information

Previous Close Price
$33.04
Day Range
$32.88–33.49
52-Week Range
$31.63–51.14
Bid/Ask
$32.81 / $33.24
Market Cap
$7.73 Bil
Volume/Avg
3.0 Mil / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
7.03
Price/Sales
0.52
Dividend Yield
1.70%
Dividend Yield (Forward)
1.34%
Total Yield
1.70%

Company Profile

BorgWarner is a Tier I auto-parts supplier with three operating segments. The air management group makes turbochargers, e-boosters, e-turbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, powertrain sensors, and cabin heaters. The drivetrain and battery systems group produces automatic transmission components, torque management products, battery heaters, battery charging, and battery modules. The e-propulsion segment makes e-motors, power electronics, and software and control modules. The company's largest customers are Ford and Volkswagen at 13% and 8% of 2022 revenue, respectively. Geographically, Europe accounted for 34% of 2022 revenue, while Asia and North America were 32% each.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Small Value
Total Number of Employees
52,700
Website
https://www.borgwarner.com

Competitors

Valuation

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Metric
BWA
VTSC
MGA
Price/Earnings (Normalized)
 7.0331.4611.03
Price/Book Value
 1.341.231.38
Price/Sales
 0.520.400.38
Price/Cash Flow
 4.866.205.65
Price/Earnings
BWA
VTSC
MGA

Financial Strength

Metric
BWA
VTSC
MGA
Quick Ratio
 1.210.720.72
Current Ratio
 1.651.121.11
Interest Coverage
 34.881.759.47
Quick Ratio
BWA
VTSC
MGA

Profitability

Metric
BWA
VTSC
MGA
Return on Assets (Normalized)
 8.06%1.43%4.89%
Return on Equity (Normalized)
 18.92%3.57%13.15%
Return on Invested Capital (Normalized)
 11.52%3.56%8.71%
Return on Assets
BWA
VTSC
MGA

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