BorgWarner Vice President Sells $100K Worth of Shares Amid Revenue Growth and Profitability Concerns

BorgWarner's Vice President, Isabelle McKenzie, sold 2,500 shares worth $100,025 on August 14. BorgWarner is a tier one supplier of automotive technologies, with a revenue growth rate of 0.97% in Q2 2025. The company has a low gross margin of 17.59% and an EPS below the industry average. BorgWarner's debt-to-equity ratio is below industry standards, but its P/E ratio is higher than average. The EV/EBITDA ratio is lower than industry benchmarks, indicating potential undervaluation.

BorgWarner Inc. (NYSE: BWA) recently faced significant insider selling, with Vice President Isabelle McKenzie unloading 2,500 shares worth $100,025 on August 14. This sale comes amidst the company's quarterly earnings report and a series of institutional investment buys. Here's a closer look at the company's financials and the implications of the insider selling.

Financial Performance

BorgWarner reported a 0.97% revenue growth rate in Q2 2025, indicating a solid but modest increase in top-line earnings compared to its peers in the Consumer Discretionary sector. The company's gross margin stood at 17.59%, signaling potential concerns about cost management and overall profitability relative to its industry counterparts. Despite this, BorgWarner's earnings per share (EPS) were below the industry average, with a net margin of 1.50% and a return on equity of 16.17%.

Valuation Metrics

The company's debt-to-equity ratio is below industry standards, suggesting a prudent approach to leverage. However, BorgWarner's price-to-earnings (P/E) ratio is higher than average, at 44.09. Additionally, the enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is lower than industry benchmarks, indicating potential undervaluation. This could be an attractive sign for investors, as it suggests the stock may be undervalued.

Institutional Investment

Several institutional investors have bolstered their positions in BorgWarner. Citigroup Inc. raised its stake by 112.1% in the first quarter, owning 0.24% of the company's shares worth $15,045,000. Other notable investors include Global X Japan Co. Ltd., Manchester Capital Management LLC, LRI Investments LLC, Meeder Asset Management Inc., and Allworth Financial LP, who all increased their holdings in the first quarter. This suggests a positive outlook from the investment community.

Analyst Ratings

Several research firms have upgraded BorgWarner's stock. Wall Street Zen upgraded the stock from a "buy" rating to a "strong-buy" rating, while Piper Sandler, Barclays, UBS Group, and Robert W. Baird all raised their price targets. Despite the positive analyst sentiment, BorgWarner currently has a consensus rating of "Moderate Buy" and an average price target of $39.64.

Conclusion

The insider selling by Isabelle McKenzie, while significant, should not be over-interpreted. The sale could be due to personal financial reasons unrelated to the company's prospects. However, it is essential to consider the broader context, including the company's financial performance, valuation metrics, and institutional investment trends. Investors should continue to monitor BorgWarner's earnings and analyst ratings to make informed decisions.

References

[1] https://www.marketbeat.com/instant-alerts/filing-borgwarner-inc-nysebwa-shares-bought-by-citigroup-inc-2025-08-15/
[2] https://www.benzinga.com/insights/news/25/08/47158481/insider-unloading-isabelle-mckenzie-sells-100k-worth-of-borgwarner-shares