Last Updated: 10 Nov 2024
Executive Summary
BorgWarner Inc. (BWA) is a leading automotive supplier with a strong financial position and promising growth prospects. The company's recent financial performance has been impressive, with revenue and earnings growth in the latest quarter. Analysts remain bullish on BWA, with a consensus target price of $41.54 and a majority recommending a "Buy" rating.
Company Overview
BorgWarner Inc. is an American multinational automotive supplier headquartered in Auburn Hills, Michigan. The company designs, manufactures, and distributes a wide range of automotive components, including powertrain systems, emissions control systems, and thermal management systems. BorgWarner serves a diverse customer base, including major automakers and Tier 1 suppliers.
Fundamental Analysis
Revenue and Earnings: BWA reported revenue of $14.17 billion in the trailing twelve months (TTM), an increase of 3.9% year-over-year. Diluted EPS for the TTM period was $3.91, representing an increase of 6.3% year-over-year.
Profitability: BWA's gross profit margin and operating margin for the TTM period were 21.9% and 8.4%, respectively. The company's return on assets and return on equity for the TTM period were 5.3% and 15.9%, respectively.
Valuation: At the current stock price of $33.92, BWA trades at a trailing PE ratio of 8.68 and a forward PE ratio of 7.91. The company's price-to-sales ratio is 0.524, and its price-to-book ratio is 1.205.
Financial Health: BWA has a strong financial position with $1.88 billion in EBITDA and $28.15 in book value per share. The company's debt-to-equity ratio is 0.35, indicating a manageable level of debt.
Technical Analysis
Trend: BWA's stock price has been in a downtrend since reaching a 52-week high of $37.98 in March 2023. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has found support at the $33 level, while resistance is present at the $35 level.
Technical Indicators: The relative strength index (RSI) is currently at 42, indicating that the stock is in a neutral zone. The moving average convergence divergence (MACD) is also neutral, with the MACD line below the signal line.
Short Term Outlook
In the short term, BWA's stock price is likely to remain range-bound between $33 and $35. The stock may face resistance at the $35 level, while support is present at the $33 level.
Long Term Outlook
In the long term, BWA's growth prospects are promising. The company is well-positioned to benefit from the growing demand for electric vehicles and the increasing adoption of advanced driver assistance systems (ADAS). Analysts expect BWA's revenue and earnings to continue to grow in the coming years.
Analyst Recommendations
Analysts are generally bullish on BWA. The consensus target price for the stock is $41.54, which represents a potential upside of 22.5%. The majority of analysts recommend a "Buy" rating for the stock, with only a small minority recommending a "Hold" rating.
