​Vontier Corporation (NYSE:VNT) is one of the Most Undervalued Tech Stocks to Buy in 2026. Wall Street is bullish on Vontier Corporation (NYSE:VNT) as the company gets close to releasing its fiscal Q4 2025 results on February 12. Analysts’ 12 month price target suggests more than 17% upside from the current levels. ​Recently, on January 7, Julian Mitchell from Barclays reiterated a Buy rating on the stock with a price target of $47. Earlier on December 4, John Eade from Argus Research also reiterated a Bu ...

Core Viewpoint - Mitsubishi Electric Corp. is planning to sell its automotive equipment business, with potential bids expected to exceed $1.3 billion [1][2]. Group 1: Sale Details - The company intends to solicit bids for its automotive unit, accepting first-round proposals until January 26 from potential buyers, which may include private equity firms and major automotive suppliers [1]. - The estimated value of the sale is over $1.3 billion, indicating significant interest in the automotive equipment sector [1]. Group 2: Market Conditions - Analysts highlight a slowdown in electric vehicle sales, particularly in the US, and competitive pressures in key markets like China, which are impacting profitability for parts suppliers, including Mitsubishi Electric's auto division that specializes in inverters and automotive motors [2]. - Mitsubishi Electric has been actively seeking to restructure its automotive equipment business in response to these challenging market conditions [2].

Core Insights - Valeo has launched its Elevate 2028 plan, aiming for steady profit increases, higher cash generation, and a return to sales growth by 2028 [1][4][11] Financial Trajectory - By 2028, Valeo anticipates sales between €22-24 billion, an operating margin of 6-7%, and free cash flow after interest of at least €500 million [2][39] - The 2025 guidance for sales and adjusted EBITDA remains confirmed, with free cash flow before interest revised upwards to slightly above €550 million [3][30] Profit Improvement - Valeo is committed to a steady increase in profit starting from 2022, with a target operating margin improvement from 4.3% in 2024 to 6-7% by 2028 [14][25] - The company expects gross margin to remain above 19% of sales, aided by improved industrial performance and AI integration [13][12] Cash Generation - The company aims for a record-high free cash flow of at least €700 million before one-off restructuring costs in 2025, translating to over €500 million by 2028 after restructuring and interest [18][21] - Cash generation improvements are driven by reduced CAPEX and lower gross R&D expenses, with a projected €200 million decrease in R&D for 2025 [19][20] Growth Strategy - Valeo expects to return to sales growth in 2027, supported by a strong order book accumulated from 2022 to 2025 [22][23] - The cumulative order intake from 2022 to H1 2025 is 1.4 times its cumulative OEM sales, with significant contracts expected to ramp up sales [23][24] Technological Leadership - Valeo is positioned as a global leader in electrification, safety, and software-defined vehicle technologies, with a focus on expanding in key markets like China, India, and North America [11][30] - The POWER division is projected to see significant growth, with sales expected to rise from €10.5 billion in 2024 to between €10.5-11.5 billion in 2028 [25][28] Market Expansion - In China, Valeo anticipates a 40% growth in POWER sales from 2024 to 2028, leveraging its strong market position [24][32] - The company expects its sales in India to triple from €220 million in 2024 to approximately €700 million by 2028 [32] Sustainability Commitment - Valeo aims to achieve Net Zero by 2050, with significant reductions in greenhouse gas emissions planned by 2030 [42][43] - The company has been recognized by major ESG rating agencies for its sustainability performance, maintaining high ratings across various assessments [40][41]

Core Insights - Vehicle Service Group (VSG), a subsidiary of Dover Corporation, has launched the SPOA40AV, an electro-hydraulic 2-post lift designed for all vehicle types, enhancing energy efficiency and operational speed [1][2][3]. Product Features - The SPOA40AV integrates energy-saving electro-hydraulic features, offering fast lowering and lifting times while maintaining stability with a compact design [2]. - The lift's patent-pending AV arms extend 20% longer and retract shorter, facilitating the lifting of various vehicle types, including city cars and long-wheelbase vans, without underbody contact [3]. - A low, adjustable adapter height allows technicians to access OEM lifting points on electric and luxury vehicles, significantly reducing the risk of accidental contact with the vehicle underbody [4]. Company Background - Rotary Solutions, part of VSG, has been a leader in vehicle service and repair shop productivity since 1925, with a commitment to designing equipment that enhances safety and efficiency in workshops [5]. - VSG, under Dover Corporation, specializes in vehicle lifting, wheel service, collision repair, and aftermarket OEM equipment, leveraging nearly 100 years of industry experience [6]. - Dover Corporation, with annual revenues exceeding $7 billion, operates across five segments and employs approximately 24,000 people, focusing on innovative solutions and customer collaboration [7].

Core Insights - BorgWarner (BWA) reported adjusted earnings of $1.24 per share for Q3 2025, exceeding the Zacks Consensus Estimate of $1.16 and up from $1.09 in the prior-year quarter, driven by strong performance in the Turbos & Thermal Technologies segment [1][10] - The company reported net sales of $3.59 billion, a 4.1% year-over-year increase, but fell short of the Zacks Consensus Estimate of $3.63 billion [1] Segment Performance - **Turbos & Thermal Technologies**: Net sales reached $1.44 billion, up from $1.39 billion year-over-year, surpassing the Zacks Consensus Estimate of $1.38 billion. Adjusted operating income increased to $219 million from $202 million, exceeding the estimate of $213.3 million [2] - **Drivetrain & Morse Systems**: Net sales were $1.45 billion, up from $1.37 billion year-over-year, beating the Zacks Consensus Estimate of $1.36 billion. Adjusted operating income rose to $267 million from $251 million but missed the estimate of $299.4 million [3] - **PowerDrive Systems**: Sales totaled $582 million, an increase from $512 million year-over-year, but missed the Zacks Consensus Estimate of $670 million. The segment reported an adjusted operating loss of $35 million, wider than the loss of $19 million in the prior year [4] - **Battery & Charging Systems**: Sales were $132 million, down from $197 million a year ago, missing the Zacks Consensus Estimate of $172 million. The segment incurred an adjusted operating loss of $7 million, which was narrower than the loss of $8 million in the previous year [5] Financial Overview - As of September 30, 2025, BorgWarner had $2.17 billion in cash and equivalents, up from $2.09 billion at the end of 2024. Long-term debt increased to $3.9 billion from $3.8 billion [6] - Net cash provided by operating activities was $368 million, with capital expenditures totaling $111 million and free cash flow at $266 million [6] 2025 Guidance - The company revised its full-year 2025 net sales guidance to a range of $14.1-$14.3 billion, down from the previous estimate of $14-$14.4 billion. Adjusted operating margin is now expected to be between 10.3-10.5%, an increase from the earlier guidance of 10.1-10.3% [7] - Adjusted earnings per share are now estimated to be in the range of $4.60-$4.75, up from $4.45-$4.65. Operating cash flow is forecasted to be between $1,434-$1,484 million, an increase from the prior range of $1,368-$1,418 million. Free cash flow is projected to be $850-$950 million, up from the previous forecast of $700-$800 million [8]

Core Insights - The S&P 500 and Nasdaq experienced significant gains due to positive news regarding the potential end of the government shutdown and renewed trade discussions between the U.S. and China [1] - Despite the market nearing all-time highs, investor sentiment remains cautious, as indicated by CNN's Fear and Greed Index, which is currently at 29, suggesting a preference for value stocks over overheated ones [2] Value Stock Screening - A value-focused stock screening strategy is employed to identify top-ranked Zacks stocks, specifically those with Zacks Rank 1 (Strong Buys) or 2 (Buys) [3][4] - The screening criteria include P/E ratios below the industry median and P/S ratios under the industry median to ensure relative value [4][8] - The screening process also considers quarterly earnings rates above the industry median and utilizes a blend of upgrades and estimate revisions to select the best stocks [5][8] Standard Motor Products (SMP) - Standard Motor Products, Inc. (SMP) is highlighted as a leading manufacturer and distributor of automotive parts, with a focus on both aftermarket and original equipment customers [6] - SMP is projected to grow its adjusted EPS by 19% in 2025 and 14% in the following year, with revenue expected to increase by 21% in 2025 and 3% next year [9] - Over the past 15 years, SMP has outperformed its industry with a stock price increase of 280%, compared to the industry's 67% and the sector's 160% [11] - Currently, SMP trades at a 70% discount to its sector and 40% below its 15-year highs, indicating potential for further growth [13]

Core Insights - BorgWarner Inc. (BWA) is expected to report third-quarter 2025 results on October 30, with earnings per share (EPS) estimated at $1.15 and revenues at $3.60 billion, indicating a 5.5% growth in earnings year-over-year [1][2] - The consensus estimate for quarterly revenues suggests a year-over-year growth of 4.4%, with the company having beaten earnings estimates in the last four quarters, averaging a surprise of 13.9% [2][3] Financial Performance - In Q2 2025, BorgWarner reported an adjusted EPS of $1.21, surpassing the Zacks Consensus Estimate of $1.06, and net sales of $3.64 billion, exceeding the estimate of $3.55 billion, reflecting a 1% year-over-year increase [2][4] - The company experienced a 31% year-over-year increase in light vehicle eProduct sales, contributing to sales growth in Q2 2025 and expected to continue in Q3 [3][4] Operational Efficiency - BorgWarner's focus on productivity, restructuring, supply chain efficiencies, and cost management helped mitigate tariff impacts on its combustion business, leading to an increased adjusted operating margin outlook for 2025 to 10.1-10.3% [4][5] - The updated margin forecast accounts for a 10-basis-point dilution from tariffs, indicating improved operational performance [4] Earnings Prediction - The company's Earnings ESP stands at +1.38%, suggesting a favorable outlook for an earnings beat in the upcoming quarter, supported by a Zacks Rank of 3 [5][6] - Other automotive companies, such as Aptiv PLC, also show potential for earnings beats, indicating a positive trend in the automotive sector [7][8]

Market Overview - The stock market is reaching new all-time highs, driven by increased spending in the artificial intelligence sector as investors aim to capitalize on potential gains [1] - Historical data indicates that buying stocks at or near all-time highs can be beneficial, with the S&P 500 averaging a 12-month price return of 9.1% after reaching such highs [2] Stock Performance - Approximately 200 S&P 500 stocks are currently underperforming, suggesting that investors should focus on stocks that are also achieving new peaks [3] - A screening method has been developed to identify Zacks Rank 1 (Strong Buy) stocks with upward price momentum, trading within 20% of their 52-week highs [5] Featured Stock: PHINIA Inc. - PHINIA Inc. (PHIN) is highlighted as a strong buy, specializing in premium fuel systems and electrical systems for the automotive industry [6][8] - The company is expanding its portfolio through the acquisition of Electromagnet Invest AB for approximately $47 million, aimed at enhancing its capabilities in alternative fuel systems [10] Financial Performance - PHINIA exceeded Q2 earnings per share (EPS) estimates by 28% and has seen upward revisions in its EPS estimates for Q3 and FY25, earning a Zacks Rank 1 [11] - The stock has appreciated 130% over the past two years, significantly outperforming its sector and the S&P 500 [12]

Core Insights - BorgWarner reported adjusted earnings of $1.21 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $1.06 and increasing from $1.19 in the prior-year quarter [1] - The company achieved net sales of $3.64 billion, a 1% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.55 billion [1] Segmental Performance - **Turbos & Thermal Technologies**: Net sales were $1.48 billion, down from $1.5 billion year-over-year, but above the Zacks Consensus Estimate of $1.47 billion. Adjusted operating income rose to $227 million from $224 million, exceeding the estimate of $218 million [2] - **Drivetrain & Morse Systems**: Net sales totaled $1.43 billion, slightly down from $1.44 billion year-over-year, yet above the Zacks Consensus Estimate of $1.41 billion. Adjusted operating income decreased to $260 million from $266 million but surpassed the estimate of $257 million [3] - **PowerDrive Systems**: Sales increased by 25% year-over-year to $581 million, exceeding the Zacks Consensus Estimate of $464 million. The segment reported an adjusted operating loss of $33 million, improved from a loss of $49 million in the same period of 2024 [4] - **Battery & Charging Systems**: Sales were $159 million, down from $193 million year-over-year, missing the Zacks Consensus Estimate of $217 million. The segment incurred an adjusted operating loss of $12 million, wider than the $10 million loss in the previous year but narrower than the estimate of a $17.17 million loss [5] Financial Overview - As of June 30, 2025, BorgWarner had $2 billion in cash and equivalents, down from $2.09 billion at the end of 2024. Long-term debt increased to $3.9 billion from $3.76 billion [6] - Net cash provided by operating activities was $579 million, with capital expenditures totaling $77 million and free cash flow at $507 million [6] Dividend and Buyback - The company declared a quarterly cash dividend of 17 cents per share, a 55% increase from the previous payout, to be paid on September 15, 2025 [7] - BorgWarner also increased its buyback authorization to $1 billion [7] 2025 Guidance - BorgWarner raised its full-year 2025 net sales guidance to a range of $14-$14.4 billion, up from $13.6-$14.2 billion. Adjusted operating margin is now expected to be between 10.1-10.3%, an increase from the previous guidance of 9.6-10.2% [8] - Adjusted earnings per share are now estimated to be in the range of $4.45-$4.65, up from $4-$4.45. Operating cash flow is projected between $1,368-$1,418 million, and free cash flow is expected to be $700-$800 million, an increase from the previous forecast of $650-$750 million [10]

Core Insights - Valeo demonstrated improved profitability in the first half of 2025, achieving an operating margin of 4.5% and free cash flow of 252 million euros, aligning with its profitability and cash generation objectives for the year [1][34][61] - The company reported a 30% increase in order intake, reaching 11.8 billion euros, reflecting strong demand and effective price management [5][54] - Cost-cutting measures contributed significantly to financial performance, with reductions in administrative costs by 5%, investments by 23%, and gross R&D expenditure by 11% [3][36] Financial Performance - Sales totaled 10,660 million euros, a decrease of 4.1% compared to the first half of 2024, with a gross margin of 19.6%, up 1.1 percentage points year-on-year [6][35] - EBITDA reached 1,472 million euros, representing 13.8% of sales, an increase of 1.4 percentage points from the previous year [39][35] - Net attributable income was 104 million euros, down 26% from 141 million euros in the prior year, reflecting challenges in certain segments [45][35] Operational Highlights - The company experienced a significant shift in its customer mix, with Chinese automakers accounting for a growing share of order intake, which accelerated to nearly three times Valeo's sales [4][23] - Valeo was recognized as a Supplier of the Year by General Motors and Volkswagen, highlighting its operational performance and innovation in the automotive sector [5][59][60] - The POWER Division faced challenges but showed solid performance in thermal systems and transmission systems, particularly in China [28][30] R&D and Cost Management - Gross R&D expenditure decreased by 11% to 1.25 billion euros, with R&D recognized in the income statement at 10.5% of sales, up 0.8 percentage points year-on-year [36][38] - The company implemented a restructuring plan that optimized its industrial and R&D footprint, contributing to improved margins across divisions [31][32] Market Position and Future Outlook - Valeo adjusted its sales objective for 2025 to around 20.5 billion euros, primarily due to adverse currency effects, while maintaining its margin and free cash flow targets [61][62] - The automotive production environment remains challenging, with Valeo's original equipment sales underperforming compared to overall automotive production growth [20][22]