BorgWarner (NYSE:BWA) Posts Earnings Results, Beats Expectations By $0.14 EPS

BorgWarner (NYSE:BWA) issued its quarterly earnings data on Thursday. The auto parts company reported $1.39 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.25 by $0.14, Zacks reports. BorgWarner had a return on equity of 19.61% and a net margin of 3.36%. The business had revenue of $3.49 billion for the quarter, compared to analysts’ expectations of $3.50 billion. During the same quarter in the prior year, the firm posted $1.24 EPS. The firm’s quarterly revenue was down 2.9% on a year-over-year basis.

Here are the key takeaways from BorgWarner’s conference call:

• BorgWarner reported a strong third quarter despite lower vehicle production, with adjusted operating margin expanding 20 basis points to 10.9% and adjusted EPS rising 12% year over year. Free cash flow was $195 million.
• Light-vehicle eProduct sales increased 33% to $630 million, primarily driven by Europe, while the company secured nine new awards spanning combustion, hybrid, and battery-electric applications, including aluminum-wire motors and next-generation inverters.
• Management raised full-year adjusted EPS guidance to $5.20–$5.35 from $5.05–$5.30, maintained its 10.7%–10.9% operating-margin outlook, and expects to return more than $700 million to shareholders in 2026 through dividends and buybacks.
• Full-year sales guidance was narrowed to $14.0 billion–$14.2 billion, with organic sales expected to decline 2.5%–4%; the battery business is expected to remain a significant headwind because of weaker European demand and the lack of North American incentives.
• Data-center initiatives continued to advance: turbine-generator production trials are expected by year-end, microgrid inverter samples have shipped to seven customers, and initial quoting has begun. Management expects approximately $300 million of turbine-generator revenue in 2027, although it will provide more detail only in early 2027.

BorgWarner Price Performance

Shares of BWA traded down $1.60 during trading hours on Friday, reaching $51.70. 4,399,954 shares of the company’s stock traded hands, compared to its average volume of 2,942,384. The stock has a market cap of $10.53 billion, a PE ratio of 22.00, a price-to-earnings-growth ratio of 0.78 and a beta of 1.16. The company has a current ratio of 1.41, a quick ratio of 1.76 and a debt-to-equity ratio of 0.32. The firm’s 50 day simple moving average is $61.31 and its 200-day simple moving average is $60.54. BorgWarner has a 12 month low of $40.73 and a 12 month high of $78.82.

Insider Transactions at BorgWarner

In related news, Director Rajesh Kalathur acquired 7,407 shares of the firm’s stock in a transaction that occurred on Wednesday, August 19th. The shares were bought at an average cost of $67.59 per share, for a total transaction of $500,639.13. Following the completion of the transaction, the director owned 7,407 shares in the company, valued at approximately $500,639.13. This trade represents a ? increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Michael Hanley sold 5,000 shares of the firm’s stock in a transaction that occurred on Friday, August 28th. The shares were sold at an average price of $65.51, for a total transaction of $327,550.00. Following the completion of the sale, the director directly owned 34,313 shares in the company, valued at $2,247,844.63. This represents a 12.72% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 0.76% of the stock is owned by insiders.

Analysts Set New Price Targets

Several equities research analysts have recently weighed in on the company. JPMorgan Chase & Co. upped their price target on BorgWarner from $75.00 to $85.00 and gave the company an “overweight” rating in a research report on Monday, August 10th. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of BorgWarner in a research note on Friday, September 25th. UBS Group reduced their price objective on shares of BorgWarner from $95.00 to $91.00 and set a “buy” rating for the company in a research note on Wednesday, October 7th. Morgan Stanley decreased their target price on shares of BorgWarner from $95.00 to $89.00 and set an “overweight” rating on the stock in a report on Friday. Finally, Bank of America upgraded shares of BorgWarner from a “neutral” rating to a “buy” rating and increased their target price for the stock from $78.00 to $85.00 in a research note on Thursday, October 15th. Eleven equities research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $79.33.

BorgWarner announced that its Board of Directors has initiated a share buyback plan on Wednesday, August 5th that allows the company to repurchase $1 billion in outstanding shares. This buyback authorization allows the auto parts company to buy up to 7.7% of its stock through open market purchases. Stock buyback plans are often an indication that the company’s management believes its shares are undervalued.

Key Stories Impacting BorgWarner

Here are the key news stories impacting BorgWarner this week:

• Positive Sentiment: BorgWarner reported third-quarter adjusted EPS of $1.39, above the $1.24–$1.26 analyst consensus and up from $1.24 a year earlier. The company also increased its 2026 adjusted EPS guidance, highlighting the impact of cost controls and operational improvements. BorgWarner Reports Strong Third Quarter 2026 Results
• Positive Sentiment: The company announced nine business awards, including high-voltage inverter and eMotor programs, supporting its strategy to expand in electrification and build longer-term profitable growth. High-Voltage Inverter Supply Agreement
• Positive Sentiment: Despite target reductions, Morgan Stanley maintained an overweight rating with an $89 target, while RBC retained an outperform rating with a $75 target—both implying substantial potential upside from the reported share price. Morgan Stanley Ratings
• Neutral Sentiment: TD Cowen lowered its target to $67 and kept a hold rating, indicating analysts see valuation upside but remain cautious about the near-term outlook. TD Cowen Ratings
• Negative Sentiment: Third-quarter revenue was $3.49 billion, slightly below expectations and down 2.9% year over year, reflecting lower customer volumes. BorgWarner also reduced elements of its 2026 outlook, raising concerns about demand and the pace of recovery.
• Negative Sentiment: Morgan Stanley, RBC, and TD Cowen all reduced their price targets, signaling increased caution even though each firm’s revised target remains above the current trading level. RBC Ratings

BorgWarner Company Profile

BorgWarner Inc (NYSE:BWA) is a global automotive technology company that develops and manufactures propulsion and mobility systems for vehicle manufacturers and commercial vehicle customers. The company serves both internal-combustion and electrified vehicle markets, with a portfolio focused on improving vehicle efficiency, performance, emissions, and electrification.

Its products and technologies include turbochargers, emissions and thermal-management systems, transmission components, friction products, battery systems, battery charging equipment, power electronics, electric motors, and other electric-drive components.