BorgWarner Inc. Faces Challenges Amid Market Fluctuations
BorgWarner Inc. (BWA), located in Auburn Hills, Michigan, stands as a prominent automotive supplier, delivering solutions for combustion engines, hybrid systems, and electric vehicles. With a market capitalization of $6.3 billion, the company serves original equipment manufacturers (OEMs) of light vehicles, including passenger cars, SUVs, vans, light trucks, and commercial vehicles that encompass medium and heavy-duty trucks and buses.
Belonging to the “mid-cap stocks” category, BWA’s market cap showcases its significant size, influence, and established position within the auto parts industry. The firm has cultivated a competitive edge by focusing on electrification, offering diverse products, maintaining a global manufacturing footprint, and investing heavily in research and development.
Active Investor: FREE newsletter featuring in-depth stock analysis and new trade ideas.
Despite these strengths, BWA has seen a decline of 23.8% from its 52-week high of $38.23, reached on May 14, 2024. Over the last three months, BWA’s stock price dropped by 7%, underperforming against the Dow Jones Industrials Average’s slight decline during the same period.
Looking at the longer term, shares of BWA have decreased by 17.8% over the past six months and 16.2% over the past 52 weeks. In contrast, the Dow Jones Industrial Average reported marginal gains of 7.8% over the last year.
To further underline the negative trend, BWA has consistently traded below its 50-day and 200-day moving averages since mid-December 2024, with only minor fluctuations observed.
Challenges within BorgWarner, particularly in the powerdrive and battery & charging systems divisions, have contributed to this underperformance. The company has encountered impairment charges and operational setbacks despite an 8.6% rise in organic sales for its battery and charging systems, indicating ongoing issues with impairments.
On February 6, BWA shares experienced a 3% decline following the release of its Q4 results. The firm reported an adjusted EPS of $1.01, surpassing Wall Street projections of $0.92, while its revenue totaled $3.4 billion, falling short of the anticipated $3.5 billion. Looking forward, BWA projects its full-year adjusted EPS to range between $4.05 and $4.40, with revenue expected between $13.4 billion and $14 billion.
In comparison, BWA’s competitor, American Axle & Manufacturing Holdings, Inc. (AXL), has seen its shares dip 36.8% over the past six months and 45.1% over the past 52 weeks, illustrating broader challenges in the sector.
Analysts on Wall Street hold a cautiously optimistic view regarding BWA’s future. The stock has received a consensus “Moderate Buy” rating from the 16 analysts monitoring it, with a mean price target of $37.33. This suggests a potential upside of 28.2% based on current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
