BorgWarner (NYSE:BWA) reported third quarter results that surpassed expectations, lifted its full-year financial guidance, and revealed a series of new contracts in the electric and hybrid vehicle markets.
See our latest analysis for BorgWarner.
BorgWarner’s bold series of new contracts and a hike in yearly guidance have fueled strong momentum this year. The stock’s 40.9% share price return year-to-date captures investor enthusiasm, while three- and five-year total shareholder returns of over 44% and 45% highlight the longer-term trend. After a 3% bump in the past day and a robust 17.6% rise over the last 90 days, it is clear the market is rewarding BorgWarner’s shift toward electrification and its expanding presence with global automakers.
If this surge in auto-tech contracts sparks your interest, now’s a great time to see who else is innovating in the industry and discover See the full list for free.
With such strong business momentum and a year-to-date rally of over 40%, the question for investors is clear: does BorgWarner remain undervalued given its latest wins, or is the market already anticipating its next phase of growth?
BorgWarner’s most widely followed narrative places its fair value at $47, higher than the last close price of $44.14. This gap has drawn attention and highlights optimism about where the company could be headed if its execution stays strong.
Expanding platform wins, particularly with major Chinese OEMs for inverters, electric motors, and differential technologies, reflect deeper integration into next-generation EV architectures and can drive higher content per vehicle. This may strengthen long-term earnings visibility through recurring, higher-margin supply contracts.
Curious about what’s fueling this valuation call? The narrative hinges on a set of aggressive growth and margin assumptions, all tied to bold forecasts and future profitability metrics. Want to uncover the precise financial leaps analysts believe make the stock worth more? Dive in to see what big swing in results they’re staking this price target on.
Result: Fair Value of $47 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, risks remain, including lingering reliance on combustion products and possible delays in electrification trends. These factors could challenge the bullish outlook.
Find out about the key risks to this BorgWarner narrative.
Looking through the lens of price-to-earnings, BorgWarner trades at 43.4 times earnings, much higher than both its industry peers at 18.9 times and the fair ratio of 10.5 times. This premium hints at greater expectations, but it also exposes investors to sharper downside risk if forecasts are missed. Can the company’s results keep justifying such a lofty multiple?
See what the numbers say about this price — find out in our valuation breakdown.
If you think there’s another angle or want to shape your own view on BorgWarner, it’s easy to generate your own take 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.
Expand your investment strategy and get ahead of emerging trends. Don’t let opportunity pass you by when Simply Wall Street’s screeners can help you act decisively.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com