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BorgWarner Inc. (BWA), headquartered in Auburn Hills, Michigan, is a prominent player in providing innovative and sustainable solutions for the automotive industry. With a market cap of $7.2 billion, BorgWarner leverages its technological expertise and engineering excellence legacy to deliver a diverse portfolio of products that drive cleaner and more efficient mobility. The company is set to release its Q4 earnings before the market opens on Thursday, Feb. 6.
Ahead of the event, analysts expect BorgWarner to report a profit of $0.92 per share, up 2.2% from $0.90 per share in the year-ago quarter. The company has exceeded Wall Street’s EPS estimates in three of the last four quarters while missing on one other occasion.
BorgWarner delivered an EPS of $1.09 in the last reported quarter, surpassing the consensus estimate by 18.5%, driven by strong operational performance and effective cost management.
Looking ahead, analysts expect BorgWarner to report an EPS of $4.23 in fiscal 2024, up 12.8% from $3.75 in fiscal year 2023.
BorgWarner's shares have declined 4.3% over the past 52 weeks, significantly underperforming the broader S&P 500 Index's ($SPX) 25.5% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 32.1% returns over the same time frame.
BorgWarner shares have underperformed the market and peers due to weak revenue performance and a lowered 2024 sales outlook. On Oct. 31, the shares closed slightly higher after the company reported Q3 earnings results. The company reported total revenues of $3.45 billion, a 4.8% year-over-year decline, missing Wall Street's forecast of $3.53 billion.
Revised 2024 guidance projects net sales between $14 billion and $14.2 billion, down from the previous estimate of $14.1 billion to $14.4 billion and in line with 2023 sales of $14.2 billion. Operating margin is expected to be between 8.1% and 8.2%, with adjusted margins between 9.8% and 10%. Operating cash flow is forecasted to be between $1.325 billion and $1.375 billion, and free cash flow is estimated to be between $475 million and $575 million.
The current consensus opinion on BorgWarner stock is “Moderate Buy” overall. Out of 15 analysts covering the stock, nine suggest a “Strong Buy,” one recommends a “Moderate Buy,” and the remaining five analysts advise a “Hold.”
The average analyst price target for BWA is $40.57, indicating a potential upside of 27.6% from the current price levels.
