BorgWarner (BWA) just released its 2025 Sustainability Report, and if you are watching the stock, this update is worth your time. The company detailed that 87% of its revenue now comes from electric vehicle and emissions-reducing products, reflecting a significant shift toward cleaner tech. In addition, the company reported a 36% reduction in greenhouse gas emissions from 2021 levels and a 100% compliance rate on governance, highlighting why investors may be taking another look. All of this aligns with BorgWarner’s public strategy to advance zero and reduced-emissions transportation, while also focusing on employee development and sustainable growth.
This report arrives in a market that has already been showing interest in the stock. Over the past year, BorgWarner shares have rallied 38%, with momentum picking up in recent months as sustainability has become a larger priority for automotive suppliers. Results over the past month, up 5%, indicate that investors consider the emissions-cutting roadmap to be a meaningful signal. However, there have been brief pullbacks during the year, but the three-year trend (up 40%) points to continued strength. Recent news of a high-profile analyst downgrade adds a note of caution, signaling that the path ahead may not be entirely smooth.
With these developments and the shift toward sustainability, the question remains whether the market has already priced in BorgWarner’s growth story or if there is still the potential for further gains as the transition continues.
The currently most-followed analyst narrative considers BorgWarner to be trading at or near fair value, with little room for error in the market’s expectations. The consensus view is shaped by ambitious growth forecasts, balanced by uncertainties in future profit multiples.
“Analysts are assuming BorgWarner’s revenue will grow by 4.4% annually over the next 3 years. Analysts assume that profit margins will increase from 1.6% today to 6.4% in 3 years time.”
Curious what financial forecasts are fueling this razor-thin valuation call? It all hinges on bold margin expansion and solid earnings leapfrogs. But just how big of a leap are analysts really betting on? The calculation might surprise you. Dive in to find out which pivotal projections tip the scale to fair value. This is not your average auto stock outlook.
Result: Fair Value of $43.47 (ABOUT RIGHT)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, persistent reliance on combustion products and volatility in electrification trends could present challenges to the optimistic long-term outlook for BorgWarner’s growth story.
Find out about the key risks to this BorgWarner narrative.
Switching lens, the SWS DCF model shines a different light on BorgWarner. While analysts see fair value at today’s prices, our cash flow approach suggests the shares trade well below where intrinsic value might sit. Is the market overlooking something bigger?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BorgWarner for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
If these narratives don’t quite align with your own thinking, you can dig into the numbers yourself and develop a personalized view in just a few minutes. Do it your way.
A great starting point for your BorgWarner research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
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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.
Companies discussed in this article include BWA.
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