Priced as of April 17, 2025 In this note, we include the latest comp sheet and valuation metrics for global automotive OEMs (page 3), auto parts suppliers (page 5), auto auction service providers (page 13), tire manufacturers (page 14), auto rentals (page 15), and auto dealers (page 16). J P M O R G A N North America Equity Research 21 April 2025 Autos Valuation Comp Sheet Autos & Auto Parts Ryan Brinkman AC (1-212) 622-6581 ryan.j.brinkman@jpmorgan.com Rajat Gupta AC (1-212) 622-6382 rajat.gupta@jpmorgan.c ...

Core Insights - BorgWarner has been recognized on Newsweek's list of Most Trustworthy Companies in America for the second consecutive year, highlighting its commitment to trust and transparency [1][2][6] - The company improved its ranking within the Automotive & Components industry category, placing in the top 10 for 2025 [2][6] Survey Methodology - The Most Trustworthy Companies in America 2025 list was based on a survey of 25,000 U.S. residents, evaluating companies on three pillars of trust: customer, employee, and investor trust, which accounted for 80% of the evaluation [7] - An additional 20% of the evaluation was derived from social listening analysis, which gathered 304,000 mentions about the companies from various internet segments, rated by sentiment, virality, and reach [7] Company Background - BorgWarner has over 130 years of experience as a global product leader in mobility innovation, focusing on sustainability to contribute to a cleaner and safer future [4]

Core Viewpoint - Goldman Sachs analyst Mark Delaney upgraded BorgWarner Inc. from Neutral to Buy, with a price forecast of $34, highlighting its favorable positioning in the market and limited risk from tariffs [1]. Group 1: Market Positioning - BorgWarner has a below-average level of U.S. imports, indicating limited risk from ongoing or future tariffs [1]. - Approximately 20% of BorgWarner's total revenue comes from China, with about 75% tied to domestic Chinese original equipment manufacturers (OEMs) [2]. - BorgWarner's hybrid and internal combustion engine products are expected to have a longer runway, supported by a broad portfolio that includes products for all powertrain types [3]. Group 2: Product Development and Growth - The company has several upcoming product launches with domestic Chinese auto OEMs, which will strengthen its foothold in this key market [3]. - Higher content per vehicle opportunities in both hybrid and battery electric vehicles are expected to benefit BorgWarner from the rising share of hybrid volumes in the near to medium term [4]. - Although the eProduct division is currently operating at a loss, ongoing restructuring efforts and long-term growth prospects are anticipated to help the company move toward profitability [4]. Group 3: Stock Performance - BWA shares closed lower by 4.54% to $25.67 on Thursday, reflecting market reactions to recent developments [4].

Group 1 - BorgWarner Inc. is currently facing challenges within the automotive industry, particularly due to Trump's 25% tariff on automotive imports, which is impacting car manufacturers and auto parts suppliers [1] - The direct impact of the tariff on BorgWarner appears to be relatively small, indicating some resilience in the company's operations amidst industry turmoil [1] Group 2 - The investment philosophy highlighted focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1] - This investment approach is flexible and does not confine investors to traditional categories such as value, dividend, or growth investing, but rather assesses all prospects of a stock to evaluate risk-to-reward [1]

Company Overview - BorgWarner Inc. has been a transformative global product leader for over 130 years, focusing on mobility innovation [1] - The company is currently accelerating the transition to eMobility, aiming to contribute to a cleaner, healthier, and safer future [1] Upcoming Events - BorgWarner will hold its 2025 First Quarter Results Conference Call on May 7, 2025, at 9:30 am Eastern Time [2] - The conference call will be accessible live over the Internet via the company's investor relations website [2]

Group 1 - Investors in BorgWarner Inc. should monitor the stock closely due to significant activity in the options market, particularly the March 21, 2025 $20 Call, which has high implied volatility [1] - Implied volatility indicates the market's expectation of future movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a rally or sell-off [2] - BorgWarner currently holds a Zacks Rank 3 (Hold) in the Automotive - Original Equipment industry, which is in the bottom 39% of the Zacks Industry Rank, with no analysts increasing earnings estimates for the current quarter and two analysts lowering their estimates, resulting in a decrease of the Zacks Consensus Estimate from $1.12 to $0.97 per share [3] Group 2 - The high implied volatility for BorgWarner may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay, hoping the underlying stock does not move as much as expected by expiration [4]

Company Recognition - BorgWarner has been awarded on the Forbes list of America's Best Employers 2025 for the sixth time, highlighting its commitment to employee satisfaction and workplace excellence [1][3] - The recognition reflects BorgWarner's dedication to creating a supportive and empowering workplace, emphasizing that employee well-being is central to the company's success [3] Evaluation Process - The selection for America's Best Employers 2025 involved an independent survey of over 217,000 U.S. employees from companies with at least 1,000 employees, considering over 6.5 million employer evaluations [2] - The final score was based on personal evaluations from employees and public evaluations from friends, family, and industry peers, with a higher weighting on personal evaluations [2] Company Philosophy - BorgWarner's Chief Human Resources Officer stated that the award reflects the company's philosophy that when employees thrive, the company thrives, reinforcing its commitment to nurturing talent and celebrating diversity [3] - The recognition positions BorgWarner as a leader in employee satisfaction and sets a new standard for workplace excellence in the industry [3] Company Background - BorgWarner has over 130 years of experience as a global product leader in mobility innovation, focusing on sustainability and contributing to a cleaner, healthier, and safer future [5]

Core Viewpoint - BorgWarner reported strong adjusted earnings for Q4 2024, exceeding expectations, but net sales fell short of estimates, indicating mixed performance across segments [1][2]. Financial Performance - Adjusted earnings per share for Q4 2024 were $1.01, surpassing the Zacks Consensus Estimate of 92 cents and increasing from 90 cents in the prior year [1]. - Net sales for the quarter were $3.44 billion, missing the Zacks Consensus Estimate of $3.49 billion and reflecting a year-over-year decline of 2.36% [2]. Segmental Performance - **Turbos & Thermal Technologies**: Net sales were $1.41 billion, slightly down from $1.44 billion year-over-year, but beat estimates by 2.32%. Adjusted operating income rose to $223 million from $214 million, exceeding consensus by 12.98% [4]. - **Drivetrain & Morse Systems**: Net sales totaled $1.35 billion, down from $1.40 billion year-over-year, missing estimates by 1.09%. Adjusted operating income decreased to $240 million from $258 million, falling short of consensus by 3.58% [5]. - **PowerDrive Systems**: Sales were $525 million, down from $542 million a year ago, but beat estimates by 0.39%. The segment reported an adjusted operating loss of $14 million, an improvement from a loss of $16 million in the prior year [6]. - **Battery & Charging Systems**: Sales increased to $162 million from $151 million year-over-year, but missed estimates by 31.11%. The segment incurred an adjusted operating loss of $14 million, narrower than a loss of $40 million in the previous year [7]. Financial Position - As of December 31, 2024, BorgWarner had $2.09 billion in cash and equivalents, up from $1.53 billion a year earlier. Long-term debt increased to $3.76 billion from $3.71 billion [8]. - Net cash from operating activities was $682 million for the quarter, with capital expenditures at $161 million and free cash flow totaling $539 million [8]. 2025 Guidance - For full-year 2025, BorgWarner anticipates net sales between $13.4 billion and $14 billion, down from $14.1 billion in 2024. Adjusted operating margin is expected to be between 9.1% and 9.2%, with adjusted earnings projected at $4.05 to $4.40 per share [9]. - Operating cash flow is forecasted to be between $1.33 billion and $1.38 billion, while free cash flow is projected to be between $650 million and $750 million [9].

BorgWarner Inc. (NYSE:BWA) Q4 2024 Earnings Conference Call February 6, 2025 9:30 AM ET Company Participants Patrick Nolan - Vice President-Investor Relations Frédéric Lissalde - President and Chief Executive Officer Joseph Fadool - Executive Vice President and Chief Operating Officer Craig Aaron - Executive Vice President and Chief Financial Officer Conference Call Participants John Murphy - Bank of America ML Colin Langan - Wells Fargo Ryan Brinkman - JPMorgan Luke Young - Baird Joe Spak - UBS Edison Yu - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 (Exact name of registrant as specified in its charter) (State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.) Delaware 13-3404508 3850 Hamlin Road, Auburn Hills, Michigan 48326 (Address of principal executive offices) (Zip Code) Registrant's te ...