What The Financials Tell Us About BorgWarner Inc. (BWA)

BorgWarner Inc. (NYSE:BWA) finished Wednesday with a subtraction of -$0.2 to close at $47.12, a downside of -0.42 percent. An average of 1,770,160 shares of common stock have been traded in the last five days. There was a gain of $3.27 in the past week. The last 20 days have seen an average of 2,053,845 shares traded, while the 50-day average volume stands at 1,801,370.

BWA stock has increased by 9.71% in the last month. The company shares reached their 1-month lowest point of $40.28 on 09/20/21. With the stock rallying to its 52-week high on 06/03/21, shares of the company touched a low of $34.30 and a high of $55.55 in 52 weeks. In spite of this, the price is down -15.18% from the 52-week high.


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Insider Transactions

134 days have passed since BorgWarner Inc. (BWA) last reported insider trading activity. Demmerle Stefan, who is Vice President, most recently acquired $4,500 shares at $55.22 per share on Jun 02. In this transaction, the insider spent $248,490. Vice President, Fadool Joseph F., disposed of 18,000 shares at a price of $51.59 on May 27. The insider now owns more than $928,598 worth of shares. Prior to that, EVP & Chief Financial Officer Nowlan Kevin went on to Sale 20,000 shares at $51.41 each on May 14. An amount of $1,028,114 was transacted.

Valuation Metrics

BorgWarner Inc. (BWA) has a trailing price-to-earnings (P/E) ratio of 14.04, which compares with the 15.45 for the broader industry and 31.09 for the sector. In the last five years, BorgWarner Inc.’s PE ratio has ranged between 86.18 and 5.481. The stock’s beta is 1.49. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.78, the price-to-book (PB) ratio at 1.69, and the price-to-cash flow ratio at 7.54.

BorgWarner Inc. pays a $0.68 dividend per share annually. It offers a dividend yield of 1.44%. The company has a payout ratio of 20.10%. The company’s most recent quarterly dividend payment took place on Sep. 15, and it was $0.17 a share, without any change from last year. Its dividend has been increased for the last 1 consecutive years with the latest increase dividend $0.03 reported on Thursday November 9 2017. Dividends have grown by 15.25% each year over the last three years.

BorgWarner Inc. will next go ex-dividend on 30-Nov-2021. The next dividend payment BorgWarner Inc. will make is expected to be $0.17.

The quick ratio of BorgWarner Inc. for the three months ended June 29 was 1.30, and the current ratio was 1.70, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.65 and a total debt to equity ratio of 0.66 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 20.20% against a 5-year average of 20.7%. BorgWarner Inc.’s EBITDA margin for the year ending June 29 is 14.63%, while its operating margin for the same period stands at 8.60%. Its gross profit as reported stood at $1.91 billion compared to revenue of $10.16 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, BorgWarner Inc.’s return on assets was 5.20%, compared to 6.5% over the last five years. In the past year, the return on investment has been 2.20%, and the 5-year average is 10.7%. Meanwhile, the return on equity (ROE) for the past 12 months has been 12.90% and the 5-year average holds at 15.9%. For the broader industry, ROE averaged 10.14 over the past year.

Earnings Surprise

In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $3.76 billion in the quarter, while revenues of $4.01 billion were grew 62.05%. The analyst consensus anticipated BorgWarner Inc.’s latest quarter earnings to come in at $0.81 per share, but it turned out to be $1.08, a 33.30% surprise. For the quarter, EBITDA amounted to $317.0 million. Shareholders own equity worth $239.79 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at BorgWarner Inc. (BWA) price momentum. RSI 9-day as of the close on 13 October was 67.46%, suggesting the stock is Neutral, with historical volatility in this time frame at 29.70%.

As of today, BWA’s price is $46.76 +7.46% or $3.27 from its 5-day moving average. BWA is currently trading +7.75% higher than its 20-day SMA and -6.71% lower than its 100-day SMA. However, the stock’s current price level is -4.54% below the SMA50 and +20.08% above the SMA200.

The stochastic %K and %D were 87.17% and 87.47%, respectively, and the average true range (ATR) was 1.41. With the 14-day stochastic at 86.38% and the average true range at 1.37, the RSI (14) stands at 63.13%. The stock has reached 1.41 on the 9-day MACD Oscillator while the 14-day reading was at 2.00.

Analyst Ratings

Jefferies downgraded BorgWarner Inc. (NYSE: BWA) to a a Hold rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for BorgWarner Inc. (BWA) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell BWA, while 10 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 3 analysts, while 6 others rate it as a “buy”.

What is BWA’s price target for the next 12 months?

Analysts predict a range of price targets between $31.00 and $66.00, with a median target of $52.50. Taking a look at these predictions, the average price target given by analysts for BorgWarner Inc. (BWA) stock is $52.50.

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