BorgWarner Has Hidden Value In A Hybrid-Heavy Future: Analyst

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].