Stock Market News

BorgWarner downgraded to Hold, target cut to $34 from $50

2024.02.08 13:29


© Reuters.

On Thursday, CFRA introduced a downgrade within the inventory score for BorgWarner (NYSE:), altering it from Buy to Hold. This adjustment comes with a big discount within the value target, now set at $34.00, a lower from the earlier target of $50.00.

The revised 12-month target value relies on a 2025 P/E ratio of seven.5x, which represents a reduction in contrast to BorgWarner’s five-year common ahead P/E of 11.2x. CFRA additionally revised its adjusted EPS estimates, decreasing them to $3.85 from $4.20 for 2024, and to $4.55 from $4.85 for 2025.

BorgWarner reported its This autumn adjusted EPS at $0.90, a 29% decline from $1.26 in the identical quarter of the earlier 12 months, falling in need of the consensus estimate of $0.94. While the corporate noticed a 6% improve in income to $3.52 billion, this determine was $110 million beneath the consensus. Additionally, the adjusted working margin noticed a slight contraction of 30 foundation factors to 9.4%.

The firm has launched its adjusted income and EPS steering for 2024, projecting figures between $14.4 billion to $14.9 billion and $3.65 to $4.00, respectively. These projections fall beneath the consensus estimates of $15.3 billion in income and $4.25 EPS. Following the discharge of those figures and the disappointing steering, BorgWarner’s shares skilled a 6% decline.

The downgrade to Hold displays considerations over the expansion of electrical automobiles (EVs), a big consider BorgWarner’s enterprise technique. The slower adoption charges of EVs within the U.S. in contrast to different main markets could proceed to impression investor sentiment towards the corporate. Despite BorgWarner’s steering indicating a powerful 25%-40% development in eProduct gross sales for 2024, expectations had been reportedly extra optimistic prior to the announcement.

InvestingPro Insights

In the context of CFRA’s downgrade and the following value target discount for BorgWarner (NYSE:BWA), extra insights from InvestingPro might present traders with a broader perspective on the corporate’s monetary well being and market place.

InvestingPro Data highlights that BorgWarner is presently buying and selling at a low earnings a number of, with a P/E Ratio (Adjusted) for the final twelve months as of Q3 2023 at simply 5.96, which is decrease than the business common. This might point out that the corporate’s inventory is undervalued relative to its earnings. Additionally, BorgWarner’s market capitalization stands at $7.34 billion USD, reflecting its vital presence within the automotive business.

An essential metric for traders to think about is the corporate’s liquidity. BorgWarner has maintained a stable monetary footing as its liquid belongings exceed short-term obligations. This means that the corporate is well-positioned to deal with its instant monetary liabilities.

InvestingPro Tips additionally make clear BorgWarner’s constant efficiency and potential outlook. Analysts have revised their earnings upwards for the upcoming interval, signaling confidence within the firm’s profitability. Moreover, BorgWarner has demonstrated its dedication to shareholders by sustaining dividend funds for 11 consecutive years, with a present dividend yield of 1.3%.

Despite considerations over the EV market development, BorgWarner’s monetary stability and the analysts’ constructive earnings revision might supply reassurance to traders. For these searching for extra in-depth evaluation and extra funding suggestions, InvestingPro affords additional insights. There are presently 9 extra suggestions out there for BorgWarner on InvestingPro, which may be accessed at To improve your funding technique with these insights, use coupon code SFY24 to get an extra 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an extra 10% off a 1-year InvestingPro+ subscription.

This article was generated with the help of AI and reviewed by an editor. For extra info see our T&C.

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