Technicals Say BorgWarner Inc. (BWA) Is Worth Holding

As of Friday close, BorgWarner Inc.’s (NYSE:BWA) stock was down -$0.49, moving down -1.28 percent to $37.87. The average number of shares traded per day over the past five days has been 1,712,800 shares. 3 times new highs have been achieved over the past 5 days, with a -$0.59 fall in that time frame. In the last twenty days, the average volume was 1,702,140, while in the previous 50 days, it was 1,875,614.

Since last month, BWA stock rose 9.26%. Shares of the company fell to $32.28 on 07/14/22, the lowest level in the past month. A 52-week high of $50.09 was reached on 01/13/22 after having rallying from a 52-week low of $32.28. Since the beginning of this year, BWA’s stock price has dropped by -15.98% or -$7.20, and marked a new high 4 times. However, the stock has declined by -24.40% since its 52-week high.

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BorgWarner Inc. (BWA) last reported insider trading activity 66 days ago on Jun 01. CALAWAY TONIT M, the EVP, CAO, Gen Counsel & Sec of the company, disposed of 17,543 shares for $40.27 on Jun 01. It resulted in a $706,474 divestment by the insider. CALAWAY TONIT M sold 4,000 shares at an average price of $38.75 on May 17. The insider now owns 57,923 shares following the transaction. On Mar 09, EVP & CHRO Pryor Felecia J. sold 6,590 shares at $38.01 apiece. The transaction was valued at $250,489.

Valuation Metrics

Right now, BorgWarner Inc. (BWA) has a P/E ratio of about 13.50. The stock’s beta is 1.40. Besides these, the trailing price-to-sales (P/S) ratio of 0.60, the price-to-book (PB) ratio of 1.28, and the price-to-cash flow ratio of 11.87 may also be considered.

The latest dividend of $0.17 per share was paid out, remained unchanged from last year’s $0.17. On Thursday November 9 2017, a $0.03 dividend increase was announced.

Financial Health

In the three months ended March 30, BorgWarner Inc.’s quick ratio stood at 1.30, while its current ratio was 1.70, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending March 30 was 0.60, and the total debt-to-equity ratio was 0.61. On the profitability front, the trailing twelve-month gross margin is 19.00% percent. In the year ended March 30, operating margins totaled 7.50%. Based on annual data, BWA earned $2.85 billion in gross profit and brought in $14.84 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 8.90%. Return on equity (ROE) for the past 12 months was 9.80%.

In BorgWarner Inc.’s quarter-end financial report for March 30, it reported total debt of $4.16 billion. According to the earnings report, the company had a lower net income in the recent quarter than it did in the previous quarter. BWA’s revenue rose 0.03% to $3.87 billion during the quarter, while net income inched up to $3.76 billion. While analysts expected BorgWarner Inc. to report $0.87 quarterly earnings, the actual figure was $1.05 per share, beating the consensus estimate by 20.70%. During the quarter, the company generated $457.0 million in EBITDA. The liabilities of BorgWarner Inc. were 8.97 billion at the end of its most recent quarter ended March 30, and its total debt was $4.48 billion. The value of shareholders’ equity is $236.83 million.

Technical Picture

This quick technical analysis looks at BorgWarner Inc.’s (BWA) price momentum. With a historical volatility rate of 28.61%, the RSI 9-day stood at 56.69% on 05 August.

With respect to its five-day moving average, the current BorgWarner Inc. price is down by -1.53% percent or -$0.59. At present, BWA shares trade +9.93% above its 20-day simple moving average and +4.30% percent above its 100-day simple moving average. However, the stock is currently trading approximately +1.12% above its SMA50 and -17.35% below its SMA200.

Stochastic coefficient K was 72.68% and Stochastic coefficient D was 83.66%, while ATR was 1.09. Given the Stochastic reading of 56.52% for the 14-day period, the RSI (14) reading has been calculated as 56.70%. As of today, the MACD Oscillator reading stands at 0.41, while the 14-day reading stands at 1.09.

Analyst Ratings

Deutsche Bank upgraded its rating on BorgWarner Inc. (NYSE: BWA) to a Buy in a note to investors on July 18, 2022. The analysts firm previously had a Hold rating on the stock.BorgWarner Inc. (BWA) has been rated Overweight by analysts. According to 1 brokerage firm, BWA is a sell, and 9 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 2 analysts rate BorgWarner Inc. stock as buy, with 8 recommending it as overweight.

With a median target price of $45.50, the current consensus forecast for the stock is $32.00 – $78.00. Based on these forecasts, analysts predict BorgWarner Inc. (BWA) will achieve an average price target of $47.23.


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