Northern Trust Corp Cuts Stake in BorgWarner Inc. $BWA

Key Points

• Northern Trust Corp reduced its stake in BorgWarner Inc. by 25.2%, owning approximately 1.5 million shares worth $44.36 million after selling over 520,000 shares in the first quarter.
• BorgWarner's earnings report for the last quarter showed earnings per share of $1.21, exceeding analyst expectations, with revenue amounting to $3.64 billion.
• The company has initiated a stock repurchase program, allowing it to buy back up to $1.00 billion of its outstanding shares, indicating that the board believes the stock is undervalued.

Northern Trust Corp lowered its stake in shares of BorgWarner Inc. (NYSE:BWA - Free Report) by 25.2% in the first quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 1,548,266 shares of the auto parts company's stock after selling 520,597 shares during the period. Northern Trust Corp owned about 0.70% of BorgWarner worth $44,358,000 as of its most recent filing with the Securities & Exchange Commission.

A number of other institutional investors and hedge funds have also modified their holdings of BWA. Global X Japan Co. Ltd. increased its stake in shares of BorgWarner by 133.4% during the first quarter. Global X Japan Co. Ltd. now owns 915 shares of the auto parts company's stock worth $26,000 after purchasing an additional 523 shares in the last quarter. Manchester Capital Management LLC purchased a new stake in shares of BorgWarner during the first quarter worth about $30,000. LRI Investments LLC increased its stake in shares of BorgWarner by 1,515.0% during the fourth quarter. LRI Investments LLC now owns 969 shares of the auto parts company's stock worth $31,000 after purchasing an additional 909 shares in the last quarter. Meeder Asset Management Inc. grew its stake in BorgWarner by 63.5% during the 1st quarter. Meeder Asset Management Inc. now owns 1,388 shares of the auto parts company's stock valued at $40,000 after acquiring an additional 539 shares in the last quarter. Finally, Allworth Financial LP grew its stake in BorgWarner by 123.1% during the 1st quarter. Allworth Financial LP now owns 1,437 shares of the auto parts company's stock valued at $41,000 after acquiring an additional 793 shares in the last quarter. Hedge funds and other institutional investors own 95.67% of the company's stock.

BorgWarner Stock Performance

NYSE:BWA opened at $43.57 on Thursday. The company has a debt-to-equity ratio of 0.64, a current ratio of 2.02 and a quick ratio of 1.66. The firm has a market capitalization of $9.43 billion, a price-to-earnings ratio of 46.36, a PEG ratio of 1.32 and a beta of 1.10. The company's 50-day moving average is $37.08 and its two-hundred day moving average is $32.33. BorgWarner Inc. has a 1-year low of $24.40 and a 1-year high of $43.83.

BorgWarner (NYSE:BWA - Get Free Report) last posted its earnings results on Thursday, July 31st. The auto parts company reported $1.21 earnings per share for the quarter, beating the consensus estimate of $1.06 by $0.15. The company had revenue of $3.64 billion for the quarter, compared to analyst estimates of $3.56 billion. BorgWarner had a net margin of 1.50% and a return on equity of 16.17%. BorgWarner's revenue was up 1.0% on a year-over-year basis. During the same period in the previous year, the business posted $1.19 EPS. BorgWarner has set its FY 2025 guidance at 4.450-4.65 EPS. Analysts forecast that BorgWarner Inc. will post 4.28 EPS for the current year.

BorgWarner declared that its Board of Directors has approved a stock repurchase program on Thursday, July 31st that authorizes the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization authorizes the auto parts company to repurchase up to 13.2% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's board believes its stock is undervalued.

BorgWarner Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Monday, September 15th. Stockholders of record on Tuesday, September 2nd will be issued a $0.17 dividend. This is a positive change from BorgWarner's previous quarterly dividend of $0.11. This represents a $0.68 annualized dividend and a dividend yield of 1.6%. BorgWarner's dividend payout ratio is currently 46.81%.

Insider Activity at BorgWarner

In other news, VP Isabelle Mckenzie sold 2,500 shares of the company's stock in a transaction that occurred on Tuesday, August 12th. The shares were sold at an average price of $40.01, for a total value of $100,025.00. Following the transaction, the vice president directly owned 55,945 shares in the company, valued at approximately $2,238,359.45. This represents a 4.28% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, VP Stefan Demmerle sold 15,000 shares of the company's stock in a transaction that occurred on Tuesday, August 12th. The stock was sold at an average price of $39.31, for a total transaction of $589,650.00. Following the completion of the transaction, the vice president owned 234,040 shares in the company, valued at approximately $9,200,112.40. This represents a 6.02% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 22,500 shares of company stock worth $892,175. Company insiders own 0.45% of the company's stock.

Analyst Ratings Changes

Several analysts recently issued reports on the stock. Wall Street Zen raised shares of BorgWarner from a "buy" rating to a "strong-buy" rating in a research note on Saturday, July 12th. Robert W. Baird upped their price objective on shares of BorgWarner from $32.00 to $39.00 and gave the company a "neutral" rating in a research note on Friday, July 11th. Bank of America upped their price objective on shares of BorgWarner from $35.00 to $41.00 and gave the company a "buy" rating in a research note on Monday, June 16th. Piper Sandler upped their price objective on shares of BorgWarner from $37.00 to $44.00 and gave the company an "overweight" rating in a research note on Friday, August 1st. Finally, Morgan Stanley upped their price objective on shares of BorgWarner from $40.00 to $42.00 and gave the company an "overweight" rating in a research note on Tuesday, August 12th. Ten equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $39.64.

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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