Group 1 - BorgWarner Inc. will hold a conference call to discuss its first quarter results for 2026 on May 6, 2026, at 9:30 AM Eastern Time, accessible via their investor website [1] - The conference call will be archived for those unable to attend the live session, ensuring broader access to the financial results [2] - BorgWarner has a history of over 130 years as a global leader in mobility innovation, emphasizing sustainability in its operations [2] Group 2 - Regina Dunagan, a Senior Area Manager at BorgWarner, has been recognized with the 2026 STEP Ahead Award, highlighting the company's commitment to recognizing talent in manufacturing [2] - BorgWarner awarded the "Baby Borg" trophies to Alex Palou and Chip Ganassi for their victory in the 2025 Indianapolis 500, showcasing the company's involvement in motorsports [3]

Core Viewpoint - Wolfe Research upgraded BorgWarner to Outperform from Peerperform, setting a price target of $68, with shares increasing over 2% intra-day Wednesday [1] Group 1: Power Generation Segment - The firm identified a compelling opportunity in BorgWarner's power generation segment, highlighting favorable supply-demand dynamics, particularly in primary power [1] - Competitive product specifications and attractive total cost of ownership are expected to support growth in this segment [1] Group 2: Revenue Potential - Wolfe estimated that the opportunity in the power generation segment could generate approximately $2 billion in revenue at scale [2] - This potential revenue could contribute around $23 per share to BorgWarner's valuation [2] Group 3: Automotive Business Outlook - The firm anticipates that BorgWarner's core automotive business will reaccelerate starting in 2027, which could further enhance upside potential toward its price target [2]

Company Overview - BorgWarner, Inc. is a global leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles, producing products such as four-wheel-drive and all-wheel-drive transfer cases, automatic transmission systems, and timing chain systems aimed at improving vehicle performance and air quality [11]. Investment Ratings - BorgWarner holds a 2 (Buy) rating on the Zacks Rank, indicating a favorable investment outlook [12]. - The company has a VGM Score of A, suggesting strong performance across value, growth, and momentum metrics [12]. Growth Potential - BorgWarner is projected to achieve year-over-year earnings growth of 5.1% for the current fiscal year, supported by upward revisions in earnings estimates from six analysts over the last 60 days [12]. - The Zacks Consensus Estimate for BorgWarner's earnings has increased by $0.15 to $5.16 per share, reflecting positive market sentiment [12]. Earnings Performance - BorgWarner has demonstrated an average earnings surprise of +12.7%, indicating a history of exceeding earnings expectations [12]. - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, BorgWarner is positioned as a strong candidate for growth investors [13].

Summary of Conference Call Notes Industry Overview - The focus is on the automotive supply industry, particularly in the context of recent geopolitical tensions and their impact on market dynamics [1][2][3]. Key Points Market Performance - Suppliers have experienced a decline of **-17%** over the past month, compared to the S&P 500's decline of **-3%** [2]. - Since the onset of the Iran conflict, suppliers are down **-10%**, while the S&P 500 has decreased by **-4%** [2]. - Current supplier levels are near those of November 2025, indicating a significant drop from previous highs [2]. Geopolitical Impact - The ongoing conflict has introduced additional risks to the 2026 outlook, particularly concerning rising costs and supply chain pressures [2]. - S&P Global has reduced its global Light Vehicle Production (LVP) forecast for 2026 by **-0.7%** (approximately **685k units**), with **35%** of this reduction attributed to the Middle East/Africa region, where US suppliers have minimal exposure [2]. Mid-term Outlook - Despite the challenges, there are reasons to be cautiously optimistic about individual companies within the sector [3]. - The mid-term backdrop remains mixed, with production expected to plateau and limited volume growth anticipated [1]. Company-Specific Insights - **APTV**: Limited downside is expected, presenting a positive risk/reward scenario [5]. - **ADNT**: Faces challenges due to lower-quality perception but could rebound if market conditions improve [5]. - **BWA**: Has potential growth avenues through TurboCell, which is generating market interest [5]. - **DAN**: Strong cash generation and capital returns are noted, with an upcoming analyst day expected to provide further insights [5]. - **DCH**: Recent sell-off attributed to guidance confusion and higher leverage risks, but future free cash flow potential is promising [5]. - **LEA**: Anticipated updates on Q1 2026 performance could provide reassurance to investors [5]. - **MGA**: Expected continued margin performance from repriced contracts, with potential for further capital returns beyond 2026 [5]. - **VC**: While consensus estimates for Q1 2026 may be high, an analyst day in June could yield positive updates [5]. Valuation Metrics - The report includes various valuation metrics for US automakers and suppliers, indicating a range of price targets and expected returns [12]. - For example, General Motors (GM) has a target price of **$102**, representing a **42%** upside from its current price of **$72.40** [12]. Stock Performance Trends - Recent stock performance trends indicate a mixed outlook, with some companies showing resilience while others struggle under current market conditions [13][14][15]. - Over the past week, several stocks have seen declines, with notable drops for Ford (F) and General Motors (GM) [14]. Conclusion - The automotive supply industry is navigating a complex landscape marked by geopolitical tensions and market volatility. While challenges persist, there are opportunities for selective investment in companies with strong fundamentals and potential for recovery [1][3][5].

Summary of BorgWarner Conference Call - March 18, 2026 Company Overview - **Company**: BorgWarner (NYSE: BWA) - **Industry**: Automotive technology, focusing on clean and efficient technology solutions for combustion, hybrid, and electric vehicles Key Points Market Outlook - Initial guidance for global production is flat to down 3%, with a midpoint of approximately down 1.5% [5][7] - Concerns about consumer demand due to higher vehicle prices and an oil shock, but current demand remains stable [7] Product Mix and Business Strategy - BorgWarner's portfolio includes foundational products, hybrids, and electric vehicles (EVs) [8] - Success is measured by outgrowing industry production in foundational and hybrid markets, with a target of mid-teens growth for e-products [10] - Regionalization is impacting the adoption rates of hybrids and EVs, with China leading in battery electric vehicle (BEV) adoption [12] Performance Metrics - Increased margins by 60 basis points and record free cash flow last year [13] - Year-over-year EPS growth of 14% [13] China Market Insights - China accounts for about 20% of BorgWarner's sales, with 75% of that from local OEMs [16] - Strong relationships with top Chinese OEMs, focusing on speed to market and technology leadership [18][20] - The company has successfully adapted to local market dynamics, achieving faster production timelines compared to Western counterparts [28] Competitive Landscape - BorgWarner is typically ranked 1 or 2 in market share for foundational products, with a path to becoming a top three player in e-products [31][32] - Observations of consolidation in the industry, with larger suppliers winning more business [31] Regulatory Environment - BorgWarner's diverse portfolio allows for adaptability to regulatory changes, focusing on both foundational and e-products as needed [36] - The company has received over 30 awards for its adaptability and success in winning new business [37] Battery Business Challenges - Anticipated revenue decline of about $200 million in the battery business for 2026, impacting growth by 150 basis points [40] - Long-term outlook remains positive due to the ongoing need for energy storage solutions [42] Data Center Market Entry - BorgWarner signed a master supply agreement with TurboCell, targeting $300 million in sales by 2027 [77] - The power generation market is expected to grow in the mid-teens percentage over the next decade [78] Capital Allocation Strategy - Focus on maintaining a healthy balance sheet, with a target of 20% of sales in liquidity [178] - Plans to balance dividends, share repurchases, and potential acquisitions to enhance earnings power [180] Hybrid Vehicle Market - Advanced hybrids present significant opportunities, with content per vehicle estimated at $2,300 compared to $570 for foundational products [165][166] - The company is seeing growth in hybrid applications, particularly in China and Europe [171] Turbocharger Business - Opportunities for growth in turbocharger penetration in North America, with potential for more efficient turbo technologies [119] - Competitive advantages include scale, technology, and customer relationships [129] Additional Insights - The company is exploring power generation, power conversion, and power storage as growth areas outside of automotive [116] - The competitive landscape for new products includes both primary power and backup generation markets, with a focus on flexibility and efficiency [135] This summary encapsulates the key insights and strategic directions discussed during the BorgWarner conference call, highlighting the company's adaptability and growth potential in a changing automotive landscape.

Core Insights - BorgWarner has been recognized for its sustainability efforts by being included in Corporate Knights' Global 100 index and the USA 25 Most Sustainable Corporations list for 2026 [1][2] Group 1: Recognition and Rankings - This is the second consecutive year that BorgWarner has been named to the Global 100, ranking first in the auto components industry, eighth in the cars and trucks manufacturing peer group, and third among U.S.-based automotive companies [2][7] - In the inaugural USA 25 Most Sustainable Corporations list, BorgWarner ranked 21st overall and third within the automotive industry [2][7] Group 2: Sustainability Metrics - The rankings were based on three key performance indicators (KPIs): sustainable revenue, sustainable investment, and sustainable revenue momentum [3] - Sustainable revenue is defined as the percentage of total revenue derived from sustainable products, while sustainable investment refers to the percentage of total investment in sustainable projects or research [3] Group 3: Company Vision and Commitment - BorgWarner's President and CEO, Joseph Fadool, emphasized the company's commitment to innovation in clean mobility solutions and the importance of a resilient product portfolio that aligns with a vision of a clean, energy-efficient world [4][5]

Core Viewpoint - BorgWarner's recent earnings report shows a mixed performance, with adjusted earnings per share beating expectations but a decline in share price over the past month, raising questions about future performance leading up to the next earnings release [1][2]. Financial Performance - BorgWarner reported adjusted earnings of $1.35 per share for Q4 2025, exceeding the Zacks Consensus Estimate of $1.16 and increasing from $1.01 in the prior-year quarter [2]. - Net sales for the quarter reached $3.57 billion, a 3.9% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.51 billion [2]. Segmental Performance - **Turbos & Thermal Technologies**: Net sales were $1.4 billion, slightly down from $1.41 billion year-over-year, but above the estimate of $1.39 billion. Adjusted operating income decreased to $198 million from $223 million, missing the estimate of $217 million [3]. - **Drivetrain & Morse Systems**: Net sales increased to $1.41 billion from $1.35 billion year-over-year, exceeding the estimate of $1.37 billion. Adjusted operating income rose to $271 million from $240 million, surpassing the estimate of $261 million [4]. - **PowerDrive Systems**: Sales increased to $623 million from $525 million year-over-year, exceeding the estimate of $590 million. Adjusted operating income improved to $28 million from a loss of $14 million in the previous year [5]. - **Battery & Charging Systems**: Sales decreased to $149 million from $162 million year-over-year but exceeded the estimate of $132 million. Adjusted operating income improved to $2 million from a loss of $14 million in the previous year [6]. Balance Sheet and Cash Flow - As of December 31, 2025, BorgWarner had $2.31 billion in cash and equivalents, up from $2.09 billion a year earlier. Long-term debt increased to $3.89 billion from $3.76 billion [7]. - Net cash provided by operating activities was $619 million for the quarter, with capital expenditures totaling $162 million and free cash flow at $470 million [7]. 2026 Guidance - For full-year 2026, BorgWarner anticipates net sales between $14.1 billion and $14.3 billion, compared to $14.32 billion in 2025. Adjusted operating margin is expected to be between 10.7% and 10.9% [8]. - Adjusted earnings per share are projected to be in the range of $5 to $5.20, up from $4.91 in 2025. Operating cash flow is forecasted between $1.6 billion and $1.7 billion, compared to $1.65 billion in 2025. Free cash flow is expected to be between $900 million and $1.1 billion, down from $1.21 billion in 2025 [9]. Market Sentiment - Recent estimates for BorgWarner have shown a downward trend, indicating a shift in market sentiment [10]. - The company currently holds a Zacks Rank of 2 (Buy), suggesting an expectation of above-average returns in the coming months despite the recent estimate revisions [12]. VGM Scores - BorgWarner has a strong Growth Score of A but is lagging in Momentum with an F. The stock also has a value score of A, placing it in the top 20% for this investment strategy, resulting in an aggregate VGM Score of A [11].

Core Viewpoint - BorgWarner Inc. is recognized as one of the best very cheap stocks to buy in 2026, with a recent upgrade from UBS analyst Joseph Spak indicating a more favorable outlook for the company's stock due to its emerging TurboCell opportunity in data-center power generation [1][2]. Financial Performance - In 2025, BorgWarner reported net sales of approximately $14.3 billion, an increase of about $200 million from the previous year [3]. - Adjusted earnings per share rose by 14% year over year, and free cash flow exceeded $1.2 billion, marking a roughly 66% increase from 2024 [3]. - The company returned about 52% of its free cash flow to shareholders, totaling approximately $630 million through share repurchases and other capital returns [3]. Share Repurchase Program - BorgWarner repurchased $400 million worth of shares in 2025 and has $600 million remaining under its repurchase authorization [3]. - Since 2021, the company has repurchased around 31 million shares, reducing its share count by approximately 13% [3]. 2026 Guidance - For 2026, BorgWarner's guidance projects total sales between $14.0 billion and $14.3 billion, with expectations of a $200 million benefit from foreign exchange movements [4]. - The company anticipates organic sales to decline between 3.5% and 1.5%, with light-vehicle markets expected to align with overall industry trends [4]. - Adjusted operating margins are expected to range from 10.7% to 10.9%, and adjusted earnings per share are projected to be between $5.00 and $5.20, indicating approximately 4% growth at the midpoint [4]. Company Overview - BorgWarner is a global automotive supplier headquartered in Auburn Hills, Michigan, focusing on technologies that enhance efficiency and performance in combustion, hybrid, and electric vehicles [5]. - The company operates in 24 countries and produces components such as turbochargers, electric propulsion modules, and advanced battery systems for automakers worldwide [5].

Group 1 - BorgWarner is part of the Auto-Tires-Trucks sector, which includes 103 individual stocks and holds a Zacks Sector Rank of 6 [2] - The Zacks Rank system highlights stocks with characteristics to outperform the market, and BorgWarner currently has a Zacks Rank of 2 (Buy) [3] - The Zacks Consensus Estimate for BorgWarner's full-year earnings has increased by 3.1% in the past quarter, indicating improved analyst sentiment [4] Group 2 - BorgWarner has returned approximately 17.6% year-to-date, while the average return for the Auto-Tires-Trucks group is a loss of about 6.4%, demonstrating that BorgWarner is outperforming its peers [4] - BorgWarner belongs to the Automotive - Original Equipment industry, which includes 54 companies and currently ranks 82 in the Zacks Industry Rank, with an average loss of 2.2% this year [6] - Investors in the Auto-Tires-Trucks sector should monitor BorgWarner and Modine for their strong performance [7]

Core Viewpoint - Investors are evaluating BorgWarner (BWA) and OPENLANE (OPLN) for potential undervalued stock opportunities in the Automotive - Original Equipment sector [1] Group 1: Zacks Rank and Earnings Outlook - BorgWarner has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while OPENLANE has a Zacks Rank of 5 (Strong Sell) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that BWA's earnings outlook is improving more significantly than OPLN's [3] Group 2: Valuation Metrics - BWA has a forward P/E ratio of 10.04, compared to OPLN's forward P/E of 21.30, indicating that BWA may be undervalued relative to OPLN [5] - The PEG ratio for BWA is 1.05, while OPLN's PEG ratio is 1.32, further supporting BWA's valuation attractiveness [5] - BWA's P/B ratio is 1.91, whereas OPLN's P/B ratio is 2.43, highlighting BWA's superior valuation metrics [6] - These metrics contribute to BWA's Value grade of A and OPLN's Value grade of C, reinforcing BWA's position as a better value option [6] Group 3: Conclusion on Investment Potential - The combination of an improving earnings outlook and favorable valuation metrics positions BWA as the superior value option in the current market [7]