BorgWarner (BWA) closed the most recent trading day at $46.15, moving +0.02% from the previous trading session. This change lagged the S&P 500’s 0.4% gain on the day. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 10.86%.
Prior to today’s trading, shares of the auto parts supplier had gained 2.01% over the past month. This has lagged the Auto-Tires-Trucks sector’s gain of 17.98% and the S&P 500’s gain of 3.98% in that time.
BorgWarner will be looking to display strength as it nears its next earnings release, which is expected to be August 2, 2023. On that day, BorgWarner is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 8.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.3 billion, up 14.49% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.72 per share and revenue of $17.38 billion. These totals would mark changes of +2.61% and +10.02%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for BorgWarner. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.95% lower within the past month. BorgWarner is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, BorgWarner is currently trading at a Forward P/E ratio of 9.78. This valuation marks a discount compared to its industry’s average Forward P/E of 15.65.
Investors should also note that BWA has a PEG ratio of 0.69 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Automotive – Original Equipment stocks are, on average, holding a PEG ratio of 0.69 based on yesterday’s closing prices.
The Automotive – Original Equipment industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 124, putting it in the top 50% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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BorgWarner Inc. (BWA) : Free Stock Analysis Report