Major Electrification Contracts and Higher Capital Returns Could Be a Game Changer for BorgWarner (BWA)

• In late July 2025, BorgWarner announced a series of major contract wins with global automakers across electric, hybrid, and combustion platforms, alongside a raised full-year outlook, a 55% dividend increase, and an expanded US$1 billion share buyback authorization scheduled through 2028. These developments highlight BorgWarner's momentum in securing advanced electrification and turbocharger technology business, supporting its transition toward higher-value vehicle components worldwide.
• BorgWarner's win of new dual-inverter and high-voltage coolant heater contracts in China and Europe indicates rising demand for its eMobility solutions and deeper inroads into fast-growing new energy markets.
• Next, we’ll consider how BorgWarner’s expanded capital returns, and its breakthrough electrification contracts, could influence its long-term growth narrative.

Find companies with promising cash flow potential yet trading below their fair value.

BorgWarner Investment Narrative Recap

To be a BorgWarner shareholder, you need confidence in global vehicle electrification and hybridization trends, and the company's ability to win key OEM contracts as vehicle platforms evolve. The recent wave of major electrification and turbocharger wins, accompanied by higher guidance and expanded buybacks, reinforces near-term catalysts centered on strong order momentum. However, persistent risks remain, especially around macroeconomic and tariff-driven demand softness in North America, this latest news does not materially reduce those concerns in the short term.

Among the latest company actions, BorgWarner’s new multi-year contracts to supply dual inverters for hybrid vehicles in China directly tie into its growth catalysts. These contracts point to continued expansion in high-value eMobility solutions and strengthen its position in one of the world’s most rapidly growing automotive markets. This supports expectations for future revenue streams even as some North American end-markets face uncertainty.

But even as global wins pile up, investors should be aware that risks tied to North American demand and ongoing tariff negotiations could still...

Read the full narrative on BorgWarner (it's free!)

BorgWarner's narrative projects $15.7 billion in revenue and $1.0 billion in earnings by 2028. This requires a 3.8% yearly revenue growth and a $689 million increase in earnings from the current $311 million.

Uncover how BorgWarner's forecasts yield a $39.67 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Across three fair value estimates from the Simply Wall St Community, views range from US$39.17 up to US$67.78 per share. Some see expansion in eProducts as a strong growth catalyst, while others point to regional demand risks, highlighting just how differently the company’s future can be seen.

Explore 3 other fair value estimates on BorgWarner - why the stock might be worth as much as 81% more than the current price!

Build Your Own BorgWarner Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your BorgWarner research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free BorgWarner research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BorgWarner's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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