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

Very undervalued with excellent 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 is not significantly more volatile than the rest 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

8.5%

BWA

-2.6%

US Auto Components

-0.4%

US Market


1 Year Return

69.2%

BWA

81.7%

US Auto Components

36.2%

US Market

Return vs Industry: BWA underperformed the US Auto Components industry which returned 81.9% over the past year.

Return vs Market: BWA exceeded the US Market which returned 36.3% over the past year.


Shareholder returns

BWAIndustryMarket
7 Day8.5%-2.6%-0.4%
30 Day14.4%-0.4%-2.3%
90 Day22.5%9.9%5.0%
1 Year72.2%69.2%82.6%81.7%39.1%36.2%
3 Year-0.2%-5.3%21.5%13.2%48.4%39.0%
5 Year47.3%35.9%80.4%56.2%116.6%92.4%

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?

36.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BWA ($48.84) is trading below our estimate of fair value ($76.39)

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 (20.8x) compared to the US Auto Components industry average (24.6x).

PE vs Market: BWA is good value based on its PE Ratio (20.8x) compared to the US market (21.5x).


Price to Earnings Growth Ratio

PEG Ratio: BWA is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: BWA is good value based on its PB Ratio (1.8x) compared to the US Auto Components industry average (2.4x).


Next Steps

Future Growth

How is BorgWarner forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

22.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BWA's forecast earnings growth (22.4% per year) is above the savings rate (2%).

Earnings vs Market: BWA's earnings (22.4% per year) are forecast to grow faster than the US market (19.3% per year).

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

Revenue vs Market: BWA's revenue (12.5% per year) is forecast to grow faster than the US market (10% per year).

High Growth Revenue: BWA's revenue (12.5% 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 (14.9%).


Next Steps

Past Performance

How has BorgWarner performed over the past 5 years?

5.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BWA has high quality earnings.

Growing Profit Margin: BWA's current net profit margins (4.9%) are lower than last year (7.3%).


Past Earnings Growth Analysis

Earnings Trend: BWA's earnings have grown by 5.4% 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 (-32.9%) over the past year, making it difficult to compare to the Auto Components industry average (16.5%).


Return on Equity

High ROE: BWA's Return on Equity (8.4%) is considered low.


Next Steps

Financial Health

How is BorgWarner's financial position?


Financial Position Analysis

Short Term Liabilities: BWA's short term assets ($6.2B) exceed its short term liabilities ($3.8B).

Long Term Liabilities: BWA's short term assets ($6.2B) exceed its long term liabilities ($5.5B).


Debt to Equity History and Analysis

Debt Level: BWA's debt to equity ratio (56.1%) is considered high.

Reducing Debt: BWA's debt to equity ratio has reduced from 70.3% to 56.1% over the past 5 years.

Debt Coverage: BWA's debt is well covered by operating cash flow (31.4%).

Interest Coverage: BWA's interest payments on its debt are well covered by EBIT (15.9x coverage).


Balance Sheet


Next Steps

Dividend

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

1.39%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BWA's dividend (1.39%) is higher than the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: BWA's dividend (1.39%) is low compared to the top 25% of dividend payers in the US market (3.64%).


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 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29%), 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% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Fred Lissalde (53 yo)

2.58yrs

Tenure

US$13,947,029

Compensation

Mr. Frederic B. Lissalde, also known as Fred, has been an Independent Director of Autoliv, Inc. since December 8, 2020. Mr. Lissalde has been President, Chief Executive Officer and Director of BorgWarner I...


CEO Compensation Analysis

Compensation vs Market: Fred's total compensation ($USD13.95M) is above average for companies of similar size in the US market ($USD10.56M).

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
President2.58yrsUS$13.95m0.024%
$ 2.8m
Kevin Nowlan
Executive VP & CFO1.92yrsUS$5.95m0.040%
$ 4.7m
Tonit Calaway
Executive VP0.42yrUS$3.20m0.017%
$ 2.0m
Joseph Fadool
VP and President2.17yrsUS$3.61m0.048%
$ 5.6m
Stefan Demmerle
VP and President & GM of PowerDrive Systems6.17yrsUS$3.23m0.047%
$ 5.5m
Daniel Etue
VP, Controller & Principal Accounting Officerno datano data0.0040%
$ 463.4k
Hakan Yilmaz
VP & Chief Technology Officer3.17yrsno data0.0036%
$ 422.6k
Patrick Nolan
Vice President of Investor Relations4.33yrsno datano data
Felecia Pryor
Executive VP & Chief Human Resources Officer1.92yrsno data0.0062%
$ 720.3k
Tom Tan
VP & President of Borgwarner China13.17yrsno datano data
Brady Ericson
VP and President & GM of Morse Systems2.17yrsUS$3.16m0.025%
$ 2.9m
Volker Weng
VP and President & GM of Drivetrain Systems0.083yrno data0.0099%
$ 1.2m

2.2yrs

Average Tenure

48.5yo

Average Age

Experienced Management: BWA's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Frederic Lissalde
President2.58yrsUS$13.95m0.024%
$ 2.8m
Alexis Michas
Independent Non-Executive Chairman7.92yrsUS$410.90k0.035%
$ 4.1m
David Haffner
Director0.42yrno data0.0024%
$ 284.8k
Vicki Sato
Independent Director7.08yrsUS$264.00k0.0083%
$ 967.8k
John McKernan
Independent Director11.67yrsUS$246.00k0.015%
$ 1.8m
Deborah McWhinney
Independent Director2.67yrsUS$249.00k0.0042%
$ 492.6k
Paul Mascarenas
Independent Director2.67yrsUS$247.50k0.0044%
$ 510.1k
Dennis Cuneo
Independent Director12.08yrsUS$256.50k0.014%
$ 1.6m
Shaun McAlmont
Director0.58yrno datano data
Nelda Connors
Director0.42yrno datano data
Michael Hanley
Independent Director4.33yrsUS$268.50k0.0054%
$ 629.2k

2.7yrs

Average Tenure

64yo

Average Age

Experienced Board: BWA's board of directors are not considered experienced ( 2.7 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 15.8%.


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$11.674b
  • Shares outstanding: 239.02m
  • 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
BWA *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 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 Analysis2021/03/06 23:10
End of Day Share Price2021/03/05 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.