BorgWarner (NYSE:BWA) Shares Gap Up - Here's Why

Key Points

• BorgWarner shares jumped from a $60.26 close to a $63.30 open, with the stock last trading near $63.36.
• Analyst sentiment remains positive overall, with a consensus “Moderate Buy” rating and an average price target of $78.86, despite some Hold and downgrade calls.
• The company beat quarterly earnings and revenue estimates, while also announcing a $1 billion share-repurchase authorization and maintaining a $0.17 quarterly dividend.

BorgWarner Inc. (NYSE:BWA - Get Free Report)'s share price gapped up prior to trading on Tuesday. The stock had previously closed at $60.26, but opened at $63.30. BorgWarner shares last traded at $63.3570, with a volume of 322,991 shares changing hands.

Wall Street Analyst Weigh In

BWA has been the topic of several research analyst reports. Wall Street Zen downgraded BorgWarner from a "buy" rating to a "hold" rating in a report on Saturday, September 12th. JPMorgan Chase & Co. boosted their price target on shares of BorgWarner from $75.00 to $85.00 and gave the stock an "overweight" rating in a research note on Monday, August 10th. TD Cowen increased their price target on shares of BorgWarner from $67.00 to $68.00 and gave the stock a "hold" rating in a research report on Thursday, August 6th. Weiss Ratings reissued a "hold (c+)" rating on shares of BorgWarner in a research note on Friday, September 25th. Finally, The Goldman Sachs Group reiterated a "buy" rating and set a $84.00 target price on shares of BorgWarner in a report on Thursday, June 11th. Nine analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $78.86.

BorgWarner Stock Performance

The company has a market capitalization of $12.90 billion, a price-to-earnings ratio of 31.68, a P/E/G ratio of 1.09 and a beta of 1.16. The stock has a 50 day simple moving average of $64.53 and a 200 day simple moving average of $63.27. The company has a quick ratio of 1.76, a current ratio of 2.13 and a debt-to-equity ratio of 0.67.

BorgWarner (NYSE:BWA - Get Free Report) last announced its quarterly earnings data on Wednesday, August 5th. The auto parts company reported $1.42 EPS for the quarter, beating analysts' consensus estimates of $1.28 by $0.14. BorgWarner had a return on equity of 19.10% and a net margin of 2.89%.The company had revenue of $3.65 billion during the quarter, compared to the consensus estimate of $3.58 billion. During the same quarter in the prior year, the firm earned $1.21 EPS. The company's quarterly revenue was up .3% compared to the same quarter last year. BorgWarner has set its FY 2026 guidance at 5.050-5.300 EPS. As a group, analysts anticipate that BorgWarner Inc. will post 5.2 earnings per share for the current fiscal year.

BorgWarner Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st were issued a dividend of $0.17 per share. This represents a $0.68 dividend on an annualized basis and a dividend yield of 1.1%. The ex-dividend date was Tuesday, September 1st. BorgWarner's payout ratio is currently 34.00%.

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

Insider Buying and Selling at BorgWarner

In other news, Director Rajesh Kalathur acquired 7,407 shares of the firm's stock in a transaction that occurred on Wednesday, August 19th. The shares were bought at an average cost of $67.59 per share, with a total value of $500,639.13. Following the acquisition, the director owned 7,407 shares in the company, valued at approximately $500,639.13. This represents a ∞ increase in their position. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CAO Amy B. Kulikowski sold 2,900 shares of BorgWarner stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $68.60, for a total value of $198,940.00. Following the transaction, the chief accounting officer owned 9,725 shares of the company's stock, valued at $667,135. The trade was a 22.97% decrease in their position. The SEC filing for this sale provides additional information. Insiders own 0.76% of the company's stock.

Hedge Funds Weigh In On BorgWarner

Hedge funds and other institutional investors have recently modified their holdings of the stock. BlackRock Inc. purchased a new stake in BorgWarner in the 2nd quarter worth about $1,678,187,000. William Blair Investment Management LLC bought a new stake in shares of BorgWarner in the 2nd quarter valued at about $251,305,000. Bank of America Corp DE purchased a new position in shares of BorgWarner in the 2nd quarter valued at approximately $250,618,000. Swedbank AB lifted its position in BorgWarner by 5.4% during the 1st quarter. Swedbank AB now owns 2,933,151 shares of the auto parts company's stock worth $159,153,000 after acquiring an additional 150,144 shares during the period. Finally, Goldman Sachs Group Inc. increased its stake in shares of BorgWarner by 21.3% in the fourth quarter. Goldman Sachs Group Inc. now owns 2,408,989 shares of the auto parts company's stock worth $108,549,000 after acquiring an additional 423,665 shares during the period. Institutional investors own 95.67% of the company's stock.

About BorgWarner

BorgWarner Inc is a global automotive supplier that develops and manufactures propulsion, drivetrain, thermal-management and emissions technologies. The company serves automakers and commercial-vehicle manufacturers, supplying components and systems for internal-combustion, hybrid and electric vehicles.

Its product portfolio includes turbochargers, transmission systems, all-wheel-drive and four-wheel-drive technologies, clutches, timing systems, battery systems, power electronics, electric motors, thermal-management products and charging-related technologies.

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