NYSE:BWA

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Undervalued with adequate balance sheet.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-10.2%

BWA

-12.6%

US Auto Components

-2.0%

US Market


1 Year Return

-49.5%

BWA

-50.1%

US Auto Components

-15.1%

US Market

Return vs Industry: BWA underperformed the US Auto Components industry which returned -48.5% over the past year.

Return vs Market: BWA underperformed the US Market which returned -14.9% over the past year.


Shareholder returns

BWAIndustryMarket
7 Day-10.2%-12.6%-2.0%
30 Day-28.8%-37.4%-19.7%
90 Day-49.7%-49.2%-23.2%
1 Year-48.5%-49.5%-49.4%-50.1%-13.4%-15.1%
3 Year-41.3%-44.0%-47.9%-53.2%10.9%3.7%
5 Year-62.6%-65.3%-45.6%-53.5%28.4%14.4%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BWA ($21.29) is trading below our estimate of fair value ($57.12)

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 (5.9x) compared to the Auto Components industry average (11x).

PE vs Market: BWA is good value based on its PE Ratio (5.9x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: BWA is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: BWA is overvalued based on its PB Ratio (0.9x) compared to the US Auto Components industry average (0.7x).


Next Steps

Future Growth

How is BorgWarner forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BWA's forecast earnings growth (9.5% per year) is above the savings rate (1.7%).

Earnings vs Market: BWA's earnings (9.5% per year) are forecast to grow slower than the US market (12.2% per year).

High Growth Earnings: BWA's earnings are forecast to grow, but not significantly.

Revenue vs Market: BWA's revenue (4.6% per year) is forecast to grow slower than the US market (7.1% per year).

High Growth Revenue: BWA's revenue (4.6% 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 (14.3%).


Next Steps

Past Performance

How has BorgWarner performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BWA has high quality earnings.

Growing Profit Margin: BWA's current net profit margins (7.3%) are lower than last year (8.8%).


Past Earnings Growth Analysis

Earnings Trend: BWA's earnings have grown by 4.9% 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 (-19.9%) over the past year, making it difficult to compare to the Auto Components industry average (-4.2%).


Return on Equity

High ROE: BWA's Return on Equity (16.5%) is considered low.


Next Steps

Financial Health

How is BorgWarner's financial position?


Financial Position Analysis

Short Term Liabilities: BWA's short term assets ($3.8B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: BWA's short term assets ($3.8B) exceed its long term liabilities ($2.5B).


Debt to Equity History and Analysis

Debt Level: BWA's debt to equity ratio (40.5%) is considered high.

Reducing Debt: BWA's debt to equity ratio has increased from 36.5% to 40.5% over the past 5 years.

Debt Coverage: BWA's debt is well covered by operating cash flow (51.4%).

Interest Coverage: BWA's interest payments on its debt are well covered by EBIT (28x coverage).


Balance Sheet

Inventory Level: BWA has a high level of physical assets or inventory.

Debt Coverage by Assets: BWA's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

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

3.19%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BWA's dividend (3.19%) is higher than the bottom 25% of dividend payers in the US market (2.04%).

High Dividend: BWA's dividend (3.19%) is low compared to the top 25% of dividend payers in the US market (5.7%).


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 low payout ratio (18.8%), 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 well covered by earnings (16.2% payout ratio).


Next Steps

Management

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

1.7yrs

Average management tenure


CEO

Frédéric Lissalde (51yo)

1.67s

Tenure

US$13,947,029

Compensation

Mr. Frédéric B. Lissalde has been President, Chief Executive Officer and Director of BorgWarner Inc. since August 01, 2018. He was Executive Vice President and Chief Operating Officer of BorgWarner Inc. si ...


CEO Compensation Analysis

Compensation vs Market: Frédéric's total compensation ($USD13.95M) is above average for companies of similar size in the US market ($USD5.63M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Frédéric Lissalde
President1.67yrsUS$13.95m0.059% $2.6m
Kevin Nowlan
Executive VP & CFO1yrUS$5.95m0.055% $2.4m
Thomas McGill
VP, Controller & Principal Accounting Officer1yrUS$1.82m0.018% $802.3k
Tonit Calaway
Executive VP1.67yrsUS$3.20m0.028% $1.2m
Hakan Yilmaz
VP & Chief Technology Officer2.25yrsno data0.0042% $184.4k
Jamal Farhat
Chief Information Officer & VP15.67yrsno datano data
Patrick Nolan
Vice President of Investor Relations3.42yrsno datano data
Scott Gallett
Vice President of Marketing11.67yrsno datano data
Felecia Pryor
Executive VP & Chief Human Resources Officer1yrno data0.0058% $253.9k
Craig Aaron
VP & Treasurer1.08yrsno data0.0086% $376.7k

1.7yrs

Average Tenure

51yo

Average Age

Experienced Management: BWA's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Frédéric Lissalde
President1.67yrsUS$13.95m0.059% $2.6m
Alexis Michas
Independent Non-Executive Chairman7yrsUS$410.90k0.039% $1.7m
Vicki Sato
Independent Director6.17yrsUS$264.00k0.0075% $328.7k
John McKernan
Independent Director10.75yrsUS$246.00k0.015% $675.1k
Deborah McWhinney
Independent Director1.75yrsUS$249.00k0.0028% $121.5k
Paul Mascarenas
Independent Director1.75yrsUS$247.50k0.0029% $128.9k
Dennis Cuneo
Independent Director11.17yrsUS$256.50k0.0092% $402.7k
Jan Carlson
Independent Director9.75yrsUS$261.00k0.0090% $395.6k
Michael Hanley
Independent Director3.42yrsUS$268.50k0.0041% $181.3k

6.2yrs

Average Tenure

63yo

Average Age

Experienced Board: BWA's board of directors are considered experienced (6.2 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


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$4.401b
  • Shares outstanding: 206.70m
  • 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
BGWBRSE (Berne Stock Exchange)YesCommon StockCHCHFAug 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 products, including timing chains, variable cam timing, crankshaft and camshaft sprockets, tensioners, guides and snubbers, front-wheel drive transmission chains, four-wheel drive chains, and hybrid power transmission chains. It also provides emissions systems, such as electric air pumps and exhaust gas recirculation (EGR) modules, EGR coolers and valves, glow plugs, and instant starting systems; thermal systems products comprising viscous fan drives, polymer fans, coolant pumps, cabin heaters, battery heaters, and battery charging; and gasoline ignition technologies. The company’s Drivetrain segment offers friction and mechanical products that include dual and friction clutch modules, friction and separator plates, transmission bands, torque converter and one-way clutches, and torsional vibration dampers. It also provides electro-hydraulic solenoids, transmission solenoid modules, and dual clutch control modules; rear-wheel drive/all-wheel drive (AWD) transfer case systems, front wheel drive-AWD coupling systems, and cross-axle coupling systems; starters, alternators, and hybrid electric motors; and motor controllers, battery chargers, and uninterrupted power source systems. The company sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 23:32
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
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.