BorgWarner's Price to Earnings Ratio Compared to its Competitors

BorgWarner Inc.'s stock price has increased by 17.24% over the past month and 26.72% in the past year. However, the price-to-earnings ratio is higher than the industry average, indicating that the stock might be overvalued. Investors should use the P/E ratio in conjunction with other financial metrics and qualitative analysis to make informed investment decisions.

BorgWarner Inc.'s stock price has experienced significant growth over the past year, with a 17.24% increase in the past month and a 26.72% rise over the last year. However, the company's price-to-earnings (P/E) ratio is higher than the industry average, suggesting potential overvaluation. Investors should consider this alongside other financial metrics and qualitative analysis to make informed investment decisions.

Analyst Ratings
Analysts' ratings for BorgWarner BWA have varied over the past quarter, ranging from bullish to bearish. According to 12 analysts, the recent ratings show a mix of bullish and somewhat bullish sentiments, with the majority of analysts maintaining an overweight or outperform rating [1]. The average price target for BorgWarner stands at $42.33, with a high estimate of $46.00 and a low estimate of $37.00. This average target has increased by 8.76% from the previous average of $38.92, reflecting a positive outlook among analysts.

Recent Insider Activity
Craig Aaron, Executive Vice President & Chief Financial Officer (EVP & CFO) at BorgWarner, sold 21,000 shares of the company for $790,939 on August 4, 2025. This transaction follows a period of no insider buys and 22 insider sells over the past year, with Aaron himself not purchasing any shares during this time [2]. The company's revenue has grown by 0.97% over the past three months, but its gross margin is low at 17.59%, indicating potential struggles in cost efficiency compared to its industry peers.

Financial Metrics
BorgWarner's market capitalization is above the industry average, suggesting a relatively larger size and higher investor confidence. The company's net margin and return on equity (ROE) surpass industry standards, highlighting exceptional financial performance. The company's return on assets (ROA) also exceeds industry averages, indicating efficient use of assets and strong financial health. However, the company's debt-to-equity ratio is below the industry average, suggesting a prudent financial strategy [3].

Conclusion
BorgWarner Inc. has seen significant stock price appreciation over the past year, driven by analyst optimism and strong financial performance. However, the higher P/E ratio suggests potential overvaluation. Investors should consider the company's financial metrics, analyst ratings, and insider activity to make well-informed investment decisions.

References:
[1] https://www.benzinga.com/insights/analyst-ratings/25/08/47059938/a-glimpse-into-the-expert-outlook-on-borgwarner-through-12-analysts
[2] https://www.ainvest.com/news/borgwarner-evp-cfo-sells-790k-company-stock-positive-revenue-trend-2508/
[3] https://www.benzinga.com/insights/news/25/08/46967417/borgwarner-evp-cfo-sold-790k-in-company-stock