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1. Company Snapshot

1.a. Company Description

BorgWarner Inc.provides solutions for combustion, hybrid, and electric vehicles worldwide.The company operates through four segments: Air Management, E-Propulsion & Drivetrain, Fuel Injection, and Aftermarket.


The Air Management segment offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery modules and systems, battery packs, battery heaters, and battery charging.The E-Propulsion & Drivetrain segment provides rotating electrical components, power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products.The Fuel Injection segment develops and manufactures gasoline and diesel fuel injection components and systems.


The Aftermarket segment sells products and services to independent aftermarket customers and original equipment service customers.This segment provides a range of solutions, including fuel injection, electronics and engine management, maintenance, and test equipment and vehicle diagnostics.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 incorporated in 1987 and is headquartered in Auburn Hills, Michigan.

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1.b. Last Insights on BWA

BorgWarner's recent performance was driven by strong Q2 earnings, beating estimates with $1.21 per share, and revenue growth. The company raised its 2025 guidance, increased dividend by 55%, and expanded its share repurchase authorization, signaling confidence in its financials. New business across its portfolio is expected to support profitable growth. The company's eProducts revenue and strategic restructuring are driving outperformance in shrinking auto markets. A competitive moat built on scale, IP, and switching costs positions BorgWarner for hybrid and EV transition benefits.

1.c. Company Highlights

2. BorgWarner's Q3 2025 Earnings: Strong Margin and Cash Flow

BorgWarner reported a robust financial performance in Q3 2025, with revenues coming in at $3.6 billion, up 2% year-over-year excluding foreign exchange. The company's adjusted operating margin was 10.7%, a 60 basis point improvement year-over-year, despite a $17 million net tariff headwind. Earnings per share (EPS) was $1.24, beating analyst estimates of $1.16. The strong underlying operational performance was driven by capitalizing on higher sales, continuing to focus on cost controls, and turning earnings into strong free cash flow of $266 million, a 32% increase from a year ago.

Publication Date: Nov -02

📋 Highlights
  • Organic Sales Growth: 2% YoY despite European customer downtime, 4% excluding CV battery and Charging Systems segment.
  • Adjusted Operating Margin: 10.7% (up 60 bps YoY) despite $17M net tariff headwind.
  • Free Cash Flow: $266M in Q3 (32% YoY growth), driven by 6% e-product and 4% foundational sales growth.
  • New Business Awards: 8 awards secured, including Stellantis 50mm VTG turbocharger supply agreement.
  • 2025 Guidance: Full-year adjusted operating margin raised to 10.3–10.5%, reflecting 20–40 bps improvement YoY.

Operational Highlights

The company's operational performance was driven by a 6% increase in light vehicle e-product sales and a 4% increase in foundational sales. BorgWarner secured multiple new business awards across its entire portfolio, including 8 new business awards across both foundational products and e-products. The company's long-term partnership with Chery has been strengthened, and it has solidified an agreement with Stellantis to supply its 50-millimeter variable turbine geometry or VTG turbocharger.

Guidance and Outlook

BorgWarner is increasing its full-year adjusted operating margin guidance to be in the range of 10.3% to 10.5% compared to its previous guidance range of 10.1% to 10.3%. The company expects its 2025 organic sales change to be down 1% to flat year-over-year. Analysts estimate next year's revenue growth at 2.5%. The company's strong performance and guidance have positioned it well for future growth.

Valuation

Using various valuation metrics, BorgWarner's stock is trading at a P/E Ratio of 69.41, P/B Ratio of 1.55, and P/S Ratio of 0.66. The EV/EBITDA ratio is 10.57, and the Dividend Yield is 1.16%. The Free Cash Flow Yield is 16.86%, indicating a strong ability to generate cash. The ROIC is 1.68%, and the ROE is 2.31%. The Net Debt / EBITDA ratio is 1.66, indicating a manageable debt level. As per Joseph Fadool, the company's focus on cost controls and capitalizing on extra sales growth will continue to drive its performance, with a 40% incremental conversion rate.

3. NewsRoom

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Edgestream Partners L.P. Sells 86,172 Shares of BorgWarner Inc. $BWA

Dec -04

Source: defenseworld.net

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BorgWarner Inc. (NYSE:BWA) Given Average Recommendation of “Moderate Buy” by Brokerages

Dec -04

Source: defenseworld.net

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Analyzing BorgWarner (NYSE:BWA) & Federal Screw Works (OTCMKTS:FSCR)

Dec -02

Source: defenseworld.net

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American Century Value Fund Q3 2025 Contributors/Detractors And Notable Trades

Dec -01

Source: seekingalpha.com

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BorgWarner Inc. (BWA) Presents at Barclays 16th Annual Global Automotive and Mobility Tech Conference Transcript

Nov -19

Source: seekingalpha.com

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BorgWarner: Goldilocks EV Positioning With Nearly 47% Upside

Nov -15

Source: seekingalpha.com

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Bailard Inc. Invests $496,000 in BorgWarner Inc. $BWA

Nov -15

Source: defenseworld.net

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Aviva PLC Invests $527,000 in BorgWarner Inc. $BWA

Nov -14

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.91%)

6. Segments

Air Management

Expected Growth: 5.5%

BorgWarner's Air Management segment growth is driven by increasing adoption of turbochargers, rising demand for fuel-efficient vehicles, and growing penetration of electrification in the automotive industry. Additionally, the company's focus on innovation, expanding product portfolio, and strategic acquisitions contribute to its 5.5% growth rate.

Drivetrain & Battery Systems

Expected Growth: 6.2%

BorgWarner's Drivetrain & Battery Systems growth is driven by increasing adoption of electric vehicles, rising demand for fuel-efficient technologies, and growing need for advanced battery management systems. Additionally, the company's strategic acquisitions and partnerships, such as the purchase of Delphi Technologies, have expanded its product portfolio and enhanced its market position.

ePropulsion

Expected Growth: 6.8%

ePropulsion's 6.8% growth is driven by increasing adoption of electric vehicles, stringent emissions regulations, and rising demand for sustainable mobility solutions. Additionally, BorgWarner's investments in R&D, strategic partnerships, and expanding production capacity are contributing to the segment's growth.

7. Detailed Products

Turbochargers

BorgWarner's turbochargers are designed to increase power and efficiency in internal combustion engines, providing improved fuel economy and reduced emissions.

Emissions Systems

BorgWarner's emissions systems include exhaust gas recirculation (EGR) coolers, diesel particulate filters (DPFs), and selective catalytic reduction (SCR) systems to reduce emissions in diesel and gasoline engines.

Drivetrain Components

BorgWarner's drivetrain components include transmission components, all-wheel drive (AWD) systems, and torque transfer cases to improve vehicle performance and efficiency.

Engine Timing Systems

BorgWarner's engine timing systems include timing chains, tensioners, and guides to improve engine performance and efficiency.

Electrification Products

BorgWarner's electrification products include electric motors, power electronics, and charging systems for hybrid and electric vehicles.

Thermal Management Systems

BorgWarner's thermal management systems include cooling systems, heat exchangers, and thermal management modules to improve engine performance and efficiency.

8. BorgWarner Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

BorgWarner Inc. faces moderate threat from substitutes due to the presence of alternative fuel-efficient technologies and electric vehicles, which could potentially replace traditional internal combustion engines.

Bargaining Power Of Customers

BorgWarner Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are highly customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

BorgWarner Inc. relies on a network of suppliers for raw materials and components. While the company has some bargaining power due to its size, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The automotive industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise. This limits the threat of new entrants to BorgWarner Inc.'s business.

Intensity Of Rivalry

The automotive industry is highly competitive, with many established players competing for market share. BorgWarner Inc. faces intense rivalry from other suppliers of automotive components, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.27%
Debt Cost 3.95%
Equity Weight 59.73%
Equity Cost 10.36%
WACC 7.78%
Leverage 67.42%

11. Quality Control: BorgWarner Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Visteon

A-Score: 6.1/10

Value: 7.6

Growth: 7.3

Quality: 7.1

Yield: 0.0

Momentum: 8.0

Volatility: 6.7

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A-Score: 5.6/10

Value: 7.9

Growth: 5.1

Quality: 4.1

Yield: 5.0

Momentum: 4.0

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A-Score: 5.6/10

Value: 3.7

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 8.5

Volatility: 6.7

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LKQ

A-Score: 5.4/10

Value: 7.4

Growth: 5.4

Quality: 4.9

Yield: 6.0

Momentum: 2.0

Volatility: 7.0

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BorgWarner

A-Score: 5.2/10

Value: 5.3

Growth: 3.7

Quality: 4.5

Yield: 2.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

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Modine

A-Score: 3.9/10

Value: 1.3

Growth: 7.7

Quality: 5.5

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.44$

Current Price

43.45$

Potential

-0.00%

Expected Cash-Flows