BorgWarner (NYSE:BWA) Board of Directors Announces Stock Buyback Plan

Key Points

• BorgWarner's board has announced a **$1 billion stock buyback plan**, allowing the repurchase of up to **13.2%** of its shares, which indicates confidence in the stock's valuation.
• Several analysts have upgraded BorgWarner's stock rating, with price targets ranging from **$34.00 to $45.00**, reflecting increasing optimism about the company's performance.
• The company reported **$1.21 earnings per share** for the last quarter, outperforming analysts' expectations and showing a **1.0% year-over-year revenue growth**.

BorgWarner (NYSE:BWA - Get Free Report) declared that its board has initiated a share buyback program on Thursday, July 31st, RTT News reports. The company plans to repurchase $1.00 billion in shares. This repurchase authorization authorizes the auto parts company to repurchase up to 13.2% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company's board of directors believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several analysts have weighed in on BWA shares. Robert W. Baird lifted their price objective on BorgWarner from $32.00 to $39.00 and gave the company a "neutral" rating in a research report on Friday, July 11th. The Goldman Sachs Group upgraded BorgWarner from a "neutral" rating to a "buy" rating and lifted their price target for the company from $31.00 to $34.00 in a research report on Thursday, April 10th. Bank of America increased their price objective on BorgWarner from $35.00 to $41.00 and gave the stock a "buy" rating in a report on Monday, June 16th. Barclays reaffirmed an "overweight" rating and issued a $45.00 target price (up from $42.00) on shares of BorgWarner in a research report on Wednesday, July 16th. Finally, Wall Street Zen raised shares of BorgWarner from a "buy" rating to a "strong-buy" rating in a research report on Saturday, July 12th. Six investment analysts have rated the stock with a hold rating, ten have issued a buy rating and one has given a strong buy rating to the stock. Based on data from MarketBeat.com, BorgWarner presently has an average rating of "Moderate Buy" and a consensus target price of $39.07.

BorgWarner Stock Performance

NYSE:BWA traded up $2.20 during mid-day trading on Thursday, hitting $36.73. 5,151,259 shares of the company traded hands, compared to its average volume of 1,591,375. The stock's fifty day moving average price is $34.16 and its 200-day moving average price is $31.18. The firm has a market cap of $8.07 billion, a price-to-earnings ratio of 29.38, a price-to-earnings-growth ratio of 1.60 and a beta of 1.09. The company has a quick ratio of 1.60, a current ratio of 1.97 and a debt-to-equity ratio of 0.65. BorgWarner has a one year low of $24.40 and a one year high of $37.29.

BorgWarner (NYSE:BWA - Get Free Report) last released its earnings results on Thursday, July 31st. The auto parts company reported $1.21 earnings per share for the quarter, beating analysts' consensus estimates of $1.06 by $0.15. The company had revenue of $3.64 billion for the quarter, compared to analysts' expectations of $3.56 billion. BorgWarner had a net margin of 2.06% and a return on equity of 16.13%. BorgWarner's revenue for the quarter was up 1.0% on a year-over-year basis. During the same quarter in the previous year, the company earned $1.19 EPS. Research analysts anticipate that BorgWarner will post 4.28 earnings per share for the current fiscal year.

BorgWarner Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Monday, September 15th. Investors of record on Tuesday, September 2nd will be given a dividend of $0.17 per share. This represents a $0.68 annualized dividend and a dividend yield of 1.9%. This is a boost from BorgWarner's previous quarterly dividend of $0.11. BorgWarner's dividend payout ratio (DPR) is currently 35.20%.

Insider Activity

In related news, EVP Tonit M. Calaway sold 27,736 shares of BorgWarner stock in a transaction that occurred on Monday, May 12th. The stock was sold at an average price of $32.83, for a total transaction of $910,572.88. Following the sale, the executive vice president owned 214,521 shares of the company's stock, valued at approximately $7,042,724.43. This trade represents a 11.45% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, VP Isabelle Mckenzie sold 5,000 shares of the firm's stock in a transaction on Friday, May 16th. The shares were sold at an average price of $33.25, for a total transaction of $166,250.00. Following the transaction, the vice president directly owned 63,445 shares of the company's stock, valued at $2,109,546.25. The trade was a 7.31% decrease in their ownership of the stock. The disclosure for this sale can be found here. Company insiders own 0.45% of the company's stock.

BorgWarner Company Profile

BorgWarner Inc, together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging.

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