Update shared on20 Sep 2025
Fair value Increased 1.06%BorgWarner’s consensus price target saw a slight upward revision to $43.93, as analysts cited resilience in U.S. auto sector fundamentals, better-than-expected Q2 results, and effective cost strategies, while valuation concerns and delayed contract impact tempered enthusiasm.
Analyst Commentary
- Bullish analysts cited stronger-than-expected resilience in U.S. auto sector fundamentals, including stable light vehicle production and consumer strength despite tariff headwinds.
- Several analysts raised price targets in response to BorgWarner's Q2 earnings beat, improved EPS outlook, and enhanced industry fundamentals.
- Positive sector-wide sentiment was driven by reduced tariff impact and effective cost-offset strategies adopted by automakers and suppliers.
- Bearish analysts flagged that BorgWarner is now trading near its historical valuation median, limiting potential for further multiple expansion without a clear inflection in results.
- While recent contract wins support future growth, some analysts noted that material topline benefits may not materialize until 2027 or later.
What's in the News
- BorgWarner raised its 2025 full-year guidance, now expecting net sales of $14.0–$14.4 billion, operating margin of 8.3–8.5%, and net earnings of $3.80–$3.97 per diluted share, citing stronger industry volumes and favorable FX.
- Significant new contracts won across turbocharger, e-motor, dual inverter, electric differential (eXD), and high-voltage coolant heater (HVCH) technologies with major global OEMs in Europe, North America, China, and Korea, with multiple production programs launching from 2025–2028.
- The company remains actively pursuing M&A with a disciplined approach focused on industrial logic, near-term accretion, and attractive valuations.
- Equity buyback plan was increased by $233 million to a total authorization of $1 billion, extended through 2028; over 12.4 million shares repurchased to date for $411.5 million.
- Quarterly dividend raised by 55% to $0.17 per share, reflecting increased return of capital to shareholders.
Valuation Changes
Summary of Valuation Changes for BorgWarner
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $43.47 to $43.93.
- The Future P/E for BorgWarner remained effectively unchanged, moving only marginally from 11.42x to 11.55x.
- The Discount Rate for BorgWarner remained effectively unchanged, moving only marginally from 8.79% to 8.83%.
Disclaimer
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