NYSE:BWA

Stock Analysis Report

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Executive Summary

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. More Details


Snowflake Analysis

Good value with reasonable growth potential.


Similar Companies

Share Price & News

How has BorgWarner's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BWA is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: BWA's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

0.9%

BWA

3.3%

US Auto Components

1.5%

US Market


1 Year Return

-8.0%

BWA

21.6%

US Auto Components

22.3%

US Market

Return vs Industry: BWA underperformed the US Auto Components industry which returned 19.6% over the past year.

Return vs Market: BWA underperformed the US Market which returned 22.1% over the past year.


Shareholder returns

BWAIndustryMarket
7 Day0.9%3.3%1.5%
30 Day11.2%22.9%8.8%
90 Day-5.2%30.4%10.8%
1 Year-6.2%-8.0%22.6%21.6%25.1%22.3%
3 Year-21.9%-25.8%5.1%-2.0%49.5%39.6%
5 Year8.6%0.1%47.2%23.3%105.8%83.3%

Long-Term Price Volatility Vs. Market

How volatile is BorgWarner's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is BorgWarner undervalued compared to its fair value and its price relative to the market?

44.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BWA ($39.87) is trading below our estimate of fair value ($71.49)

Significantly Below Fair Value: BWA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BWA is good value based on its PE Ratio (22.7x) compared to the US Auto Components industry average (35.4x).

PE vs Market: BWA is poor value based on its PE Ratio (22.7x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: BWA is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: BWA's PB Ratio (2x) is in line with the US Auto Components industry average.


Next Steps

Future Growth

How is BorgWarner forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

41.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BWA's forecast earnings growth (41.6% per year) is above the savings rate (2.2%).

Earnings vs Market: BWA's earnings (41.6% per year) are forecast to grow faster than the US market (21.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: BWA's revenue (19.8% per year) is forecast to grow faster than the US market (10.2% per year).

High Growth Revenue: BWA's revenue (19.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BWA's Return on Equity is forecast to be low in 3 years time (17.5%).


Next Steps

Past Performance

How has BorgWarner performed over the past 5 years?

5.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BWA has high quality earnings.

Growing Profit Margin: BWA's current net profit margins (4.1%) are lower than last year (7.4%).


Past Earnings Growth Analysis

Earnings Trend: BWA's earnings have grown by 5.3% per year over the past 5 years.

Accelerating Growth: BWA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BWA had negative earnings growth (-52.1%) over the past year, making it difficult to compare to the Auto Components industry average (-10.3%).


Return on Equity

High ROE: BWA's Return on Equity (8.5%) is considered low.


Next Steps

Financial Health

How is BorgWarner's financial position?


Financial Position Analysis

Short Term Liabilities: BWA's short term assets ($5.2B) exceed its short term liabilities ($2.2B).

Long Term Liabilities: BWA's short term assets ($5.2B) exceed its long term liabilities ($3.8B).


Debt to Equity History and Analysis

Debt Level: BWA's debt to equity ratio (55.9%) is considered high.

Reducing Debt: BWA's debt to equity ratio has increased from 48.2% to 55.9% over the past 5 years.

Debt Coverage: BWA's debt is well covered by operating cash flow (36.1%).

Interest Coverage: BWA's interest payments on its debt are well covered by EBIT (17.4x coverage).


Balance Sheet


Next Steps

Dividend

What is BorgWarner current dividend yield, its reliability and sustainability?

1.70%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BWA's dividend (1.71%) is higher than the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: BWA's dividend (1.71%) is low compared to the top 25% of dividend payers in the US market (4.1%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, BWA has been paying a dividend for less than 10 years.

Growing Dividend: BWA's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.6%), BWA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BWA's dividends in 3 years are forecast to be thoroughly covered by earnings (14.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Fred Lissalde (52 yo)

2.33yrs

Tenure

US$13,947,029

Compensation

Mr. Frederic B. Lissalde, also known as Fred, has been President, Chief Executive Officer and Director of BorgWarner Inc. since August 01, 2018. He was Executive Vice President and Chief Operating Officer ...


CEO Compensation Analysis

Compensation vs Market: Fred's total compensation ($USD13.95M) is about average for companies of similar size in the US market ($USD10.98M).

Compensation vs Earnings: Fred's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Frederic Lissalde
President2.33yrsUS$13.95m0.021%
$ 2.0m
Kevin Nowlan
Executive VP & CFO1.67yrsUS$5.95m0.039%
$ 3.8m
Tonit Calaway
Executive VP0.17yrUS$3.20m0.015%
$ 1.5m
Daniel Etue
VP, Controller & Principal Accounting Officerno datano data0.0039%
$ 379.2k
Hakan Yilmaz
VP & Chief Technology Officer2.92yrsno data0.0035%
$ 345.1k
Jamal Farhat
Chief Information Officer & VP16.33yrsno datano data
Patrick Nolan
Vice President of Investor Relations4.08yrsno datano data
Felecia Pryor
Executive VP & Chief Human Resources Officer1.67yrsno data0.0049%
$ 475.7k
Paul Farrell
Vice President & Chief Strategy Officer0.17yrno data0.010%
$ 990.5k
Craig Aaron
VP & Treasurer1.75yrsno data0.0051%
$ 501.1k
Eddie Sander
Director of Investor Relationsno datano datano data

1.8yrs

Average Tenure

47.5yo

Average Age

Experienced Management: BWA's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Frederic Lissalde
President2.33yrsUS$13.95m0.021%
$ 2.0m
Alexis Michas
Independent Non-Executive Chairman7.67yrsUS$410.90k0.034%
$ 3.3m
David Haffner
Director0.17yrno data0.0024%
$ 233.0k
Vicki Sato
Independent Director6.83yrsUS$264.00k0.0081%
$ 790.6k
John McKernan
Independent Director11.42yrsUS$246.00k0.015%
$ 1.4m
Deborah McWhinney
Independent Director2.42yrsUS$249.00k0.0041%
$ 402.6k
Paul Mascarenas
Independent Director2.42yrsUS$247.50k0.0043%
$ 416.3k
Dennis Cuneo
Independent Director11.83yrsUS$256.50k0.014%
$ 1.3m
Shaun McAlmont
Director0.33yrno datano data
Nelda Connors
Director0.17yrno datano data
Michael Hanley
Independent Director4.08yrsUS$268.50k0.0053%
$ 513.8k

2.4yrs

Average Tenure

64yo

Average Age

Experienced Board: BWA's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: BWA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.4%.


Top Shareholders

Company Information

BorgWarner Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BorgWarner Inc.
  • Ticker: BWA
  • Exchange: NYSE
  • Founded: 1987
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: US$9.749b
  • Shares outstanding: 244.52m
  • Website: https://www.borgwarner.com

Number of Employees


Location

  • BorgWarner Inc.
  • 3850 Hamlin Road
  • Auburn Hills
  • Michigan
  • 48326
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BWANYSE (New York Stock Exchange)YesCommon StockUSUSDAug 1993
BGWDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1993
0HOULSE (London Stock Exchange)YesCommon StockGBUSDAug 1993
B1WA34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. The company’s Engine segment offers turbocharger and turbocharger actuators; eBoosters; and timing systems produc...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/04 23:27
End of Day Share Price2020/12/04 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.