BorgWarner's Price Target Raised to $39 on Improved Industry Outlook.

Baird has raised BorgWarner's (BWA) price target from $32 to $39 with a Neutral rating, citing improved fundamentals in the vehicle technology and mobility sector. Analysts expect auto suppliers to surpass expectations in Q2 and Q3. The average target price is $37.49, implying a 4.69% upside from the current price of $35.81.

BorgWarner Inc. (BWA) has seen its price target increased by Baird from $32 to $39, maintaining a Neutral rating. This revision is driven by the firm's increased optimism towards the vehicle technology and mobility sector, as the second quarter reports approach. Analysts anticipate that auto suppliers, including BorgWarner, will likely surpass expectations in the second quarter, and the outlook for the third quarter remains promising.

The average target price for BorgWarner Inc. (BWA) stands at $37.49, according to data from 15 analysts, implying a 4.69% upside from the current price of $35.81. The consensus recommendation from 18 brokerage firms is "Outperform," indicating a bullish outlook. GuruFocus estimates the one-year GF Value for BorgWarner Inc. (BWA) at $39.19, suggesting an 9.44% upside from the current price.

In the first quarter of 2025, BorgWarner reported a strong sales outgrowth of 3.7%, driven by a 47% increase in light vehicle e-product sales. The company secured multiple new product awards, indicating robust future growth potential. Despite a 20 basis point headwind from tariffs, BorgWarner maintained an adjusted operating margin of 10.0% and improved its free cash flow by over $270 million or 89% year-over-year. The full-year sales guidance for 2025 is projected to be between $13.6 billion and $14.2 billion, with adjusted EPS guidance ranging from $4 to $4.45 per diluted share.

However, BorgWarner faces challenges in the North American battery systems business and is operating in a challenging environment with concerns about tariffs. The company revised its full-year adjusted operating margin guidance to a wider range of 9.6% to 10.2%, and it is experiencing a headwind from weaker foreign currencies.

Institutional investors and hedge funds own 95.67% of BorgWarner's stock. Ninety One UK Ltd lessened its position in shares of BorgWarner by 20.3% during the first quarter, while Global X Japan Co. Ltd. increased its stake by 133.4%. Several other large investors have also made changes to their positions in BWA.

BorgWarner stock traded up $0.35 on Tuesday, hitting $35.19. The company has a market capitalization of $7.73 billion, a P/E ratio of 28.15, and a beta of 1.09. Analysts expect BorgWarner Inc. to post 4.28 EPS for the current year.

References:
1. [1] https://www.gurufocus.com/news/2971428/bwa-price-target-increased-as-auto-sector-outlook-strengthens-bwa-stock-news
2. [2] https://www.marketbeat.com/instant-alerts/filing-ninety-one-uk-ltd-trims-stake-in-borgwarner-inc-nysebwa-2025-07-08/