Hsbc Holdings PLC Decreases Stake in BorgWarner Inc. $BWA

Key Points

• HSBC reduced its BorgWarner stake by 28.4% in the second quarter, selling 214,152 shares and retaining 540,280 shares valued at approximately $35.8 million. Institutional investors collectively own 95.67% of the company.
• BorgWarner exceeded quarterly expectations, reporting $1.42 in adjusted EPS versus the $1.28 consensus and $3.65 billion in revenue versus the $3.58 billion estimate. The company also authorized a $1 billion share-repurchase program covering up to 7.7% of outstanding shares.
• Analysts maintain a “Moderate Buy” consensus on BWA, with an average price target of $76.67 compared with the reported share price of $67.53. BorgWarner also declared a quarterly dividend of $0.17 per share, equating to a 1.0% annualized yield.

Hsbc Holdings PLC trimmed its holdings in shares of BorgWarner Inc. (NYSE:BWA - Free Report) by 28.4% in the second quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund owned 540,280 shares of the auto parts company's stock after selling 214,152 shares during the quarter. Hsbc Holdings PLC owned 0.27% of BorgWarner worth $35,785,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors also recently made changes to their positions in BWA. BlackRock Inc. purchased a new position in BorgWarner in the second quarter valued at about $1,678,187,000. AQR Capital Management LLC raised its holdings in shares of BorgWarner by 119.7% in the 3rd quarter. AQR Capital Management LLC now owns 7,518,776 shares of the auto parts company's stock worth $330,525,000 after purchasing an additional 4,095,902 shares during the period. William Blair Investment Management LLC purchased a new position in BorgWarner in the second quarter valued at approximately $251,305,000. Bank of America Corp DE bought a new position in BorgWarner during the second quarter valued at $250,618,000. Finally, Norges Bank bought a new position in BorgWarner during the fourth quarter valued at $156,794,000. 95.67% of the stock is owned by hedge funds and other institutional investors.

BorgWarner Stock Performance

BorgWarner stock opened at $67.53 on Tuesday. The company has a current ratio of 2.13, a quick ratio of 1.76 and a debt-to-equity ratio of 0.67. The firm has a market cap of $13.75 billion, a P/E ratio of 33.77, a P/E/G ratio of 1.21 and a beta of 1.12. BorgWarner Inc. has a 1-year low of $40.50 and a 1-year high of $78.82. The firm has a 50-day moving average of $65.17 and a 200-day moving average of $62.27.

BorgWarner (NYSE:BWA - Get Free Report) last released its quarterly earnings data on Wednesday, August 5th. The auto parts company reported $1.42 earnings per share for the quarter, topping the consensus estimate of $1.28 by $0.14. The business had revenue of $3.65 billion during the quarter, compared to analysts' expectations of $3.58 billion. BorgWarner had a return on equity of 19.10% and a net margin of 2.89%.The business's revenue was up .3% on a year-over-year basis. During the same quarter last year, the business posted $1.21 EPS. BorgWarner has set its FY 2026 guidance at 5.050-5.300 EPS. Sell-side analysts expect that BorgWarner Inc. will post 5.2 EPS for the current year.

BorgWarner declared that its board has approved a share buyback plan on Wednesday, August 5th that permits the company to repurchase $1.00 billion in shares. This repurchase authorization permits the auto parts company to buy up to 7.7% of its stock through open market purchases. Stock repurchase plans are often an indication that the company's leadership believes its stock is undervalued.

BorgWarner Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 1st will be given a dividend of $0.17 per share. This represents a $0.68 dividend on an annualized basis and a yield of 1.0%. The ex-dividend date of this dividend is Tuesday, September 1st. BorgWarner's payout ratio is presently 34.00%.

Insiders Place Their Bets

In related news, Director Rajesh Kalathur purchased 7,407 shares of the firm's stock in a transaction that occurred on Wednesday, August 19th. The stock was bought at an average cost of $67.59 per share, with a total value of $500,639.13. Following the completion of the purchase, the director directly owned 7,407 shares in the company, valued at approximately $500,639.13. This represents a ∞ increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Michael S. Hanley sold 5,000 shares of the firm's stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $65.51, for a total transaction of $327,550.00. Following the completion of the sale, the director owned 34,313 shares of the company's stock, valued at $2,247,844.63. This trade represents a 12.72% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.76% of the company's stock.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on BWA. The Goldman Sachs Group reaffirmed a "buy" rating and set a $84.00 price target on shares of BorgWarner in a research report on Thursday, June 11th. Deutsche Bank Aktiengesellschaft set a $80.00 price objective on shares of BorgWarner in a report on Thursday, August 6th. Robert W. Baird set a $79.00 target price on BorgWarner in a research report on Thursday, August 6th. JPMorgan Chase & Co. raised their price target on BorgWarner from $75.00 to $85.00 and gave the company an "overweight" rating in a report on Monday, August 10th. Finally, Wolfe Research restated an "outperform" rating and issued a $95.00 target price on shares of BorgWarner in a research report on Wednesday, June 3rd. Nine equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average price target of $76.67.

BorgWarner Company Profile

BorgWarner Inc is a global automotive supplier specializing in propulsion and drivetrain solutions for combustion, hybrid and electric vehicles. The company's product portfolio includes turbochargers, thermal management systems, transmission components, e-Propulsion modules and advanced fuel-efficiency technologies. BorgWarner serves original equipment manufacturers (OEMs) across passenger cars, light trucks and commercial vehicles, supporting both legacy internal-combustion engines and emerging electrification trends.

Founded in 1928 through the merger of several driveline companies, BorgWarner has grown through strategic acquisitions and continuous investment in research and development.

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