The report card is finally in for Australia’s major companies and the profit results are better than expected.Particularly notable was BHP’s monster profit and those of the four big banks, which all managed to beat market expectations.The result with just a few stragglers left to report is that the ASX 200 added 23.3 points or 0.3% to 9,168.60 points on Friday, with that record close pumping up the index by an impressive 3.7% for the month of February.Consumer stocks one weak pointThere were a few areas of ...

Core Insights - BorgWarner reported adjusted earnings of $1.35 per share for Q4 2025, exceeding the Zacks Consensus Estimate of $1.16 and up from $1.01 in the prior-year quarter, driven by strong performance in the Drivetrain & Morse Systems segment [1] - The company achieved net sales of $3.57 billion, a 3.9% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.51 billion [1] Segment 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 [2] - **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 [3] - **PowerDrive Systems**: Sales grew to $623 million from $525 million year-over-year, exceeding the estimate of $590 million. The segment reported an adjusted operating income of $28 million, a significant improvement from a loss of $14 million in the same period of 2024 [4] - **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 corresponding period of 2024 [5] Financial Overview - 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 [6] - 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 [6] 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%, consistent with the 10.7% margin in 2025 [7] - 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 reported in 2025 [8] Market Position - BorgWarner currently holds a Zacks Rank of 3 (Hold). Other better-ranked stocks in the automotive sector include Modine Manufacturing Company (Zacks Rank 1), Strattec Security Corporation (Zacks Rank 1), and PHINIA Inc. (Zacks Rank 1) [9][10]

Group 1 - Vontier Corporation (NYSE:VNT) is considered one of the most undervalued tech stocks to buy in 2026, with analysts projecting over 17% upside from current levels ahead of its fiscal Q4 2025 results [1] - Analysts from Barclays and Argus Research have reiterated a Buy rating on Vontier, both setting a price target of $47 [2] - Argus highlighted that recent stock price weakness presents a strong buying opportunity, noting the company's efforts to diversify through acquisitions to support electric-vehicle charging infrastructure and smart energy management [3] Group 2 - Management expects Q4 2026 revenue to be between $760 million and $770 million, with an adjusted operating profit margin expansion of 20 to 60 basis points year-over-year [4] - Vontier Corporation is a spinoff from Fortive Corporation, focusing on manufacturing and distributing automotive repair equipment, fueling services, and electric vehicle charging solutions [4]

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]