BorgWarner Inc. (BWA) Stock Analysis
Score ABlue Chip · Grade C · Bullish
$61.08
$88.64
+45.1%
10/10
C
Blue Chip
Investment Thesis
Good opportunity: Solid company with good risk/reward at 5.0:1.
For New Investors
Quantitative score: high
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $88.64 (+45.1%). Significantly undervalued.
PEG-Based EPS
$91.61
FCF DCF Model
$91.61
EV/EBITDA
$83.11
Blended Fair Value
$88.64
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
65/120 points
Investable
ROE (3Y Avg)
7.3%
ROIC-WACC Spread
2.5%
D/E Ratio
0.8x
Current Ratio
2.1x
Interest Coverage
13x
FCF Positive Years
3/3
Quality Flags
- Low ROE: 7.3% (need >15%, got 5/20 pts)
- ROIC spread: 2.5pp (got 6/25 pts)
- Leverage: D/E 0.8x (9/15 pts)
Market Sentiment
Wall Street Consensus
$75.00
+22.8% Upside
15 analysts
Range: $51.00 — $81.00
Rating: Buy
Our model aligns with Wall Street consensus.
Trend & Technical
Price ($60.97) is 26.2% above SMA 200 ($48.32). Bullish trend confirmed.
Tech Score 90/100 — MOMENTUM ALIGNMENT. Healthy uptrend confirmed by RSI and MACD. Technical tailwind.
Risk & Reward
Asymmetry Ratio
5.05:1
Expected Return
+24.7%
Bull Upside
+50.5%
Bear Downside
-10.0%
Excellent asymmetry: 5.05:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
Get a detailed AI-written breakdown of the investment thesis, risks, and catalysts.
Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of BWA?
Based on our multi-method conviction analysis, the estimated fair value of BorgWarner Inc. (BWA) is $88.64. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is BWA a buy, sell, or hold?
BWA currently has a BUY rating with a conviction score of 10/10. Good opportunity: Solid company with good risk/reward at 5.0:1. Quantitative score: high.
Is BWA a high-quality stock?
BorgWarner Inc. has a quality grade of C (65/120 points), rated as Investable. Key metrics include ROE of 7.3%, ROIC-WACC spread of 2.5%, and D/E ratio of 0.8x.
What type of stock is BWA?
BWA is classified as a "blue_chip" in our framework. High P/E: 35.5x, Low dividend (reinvesting): 1.0%, High FCF Yield: 9.4%, Mature growth: 7.2%, Cyclical sector: Consumer Cyclical
What do Wall Street analysts say about BWA?
15 Wall Street analysts have a consensus price target of $75.00 for BWA, representing +22.8% upside. Targets range from $51.00 to $81.00. The consensus recommendation is "Buy". Our model aligns with Wall Street consensus.
What are the risks of investing in BWA?
The risk/reward asymmetry ratio for BWA is 5.05:1, rated as Very Favorable. Excellent asymmetry: 5.05:1 ratio. Upside significantly outweighs downside. The expected return is +24.7%, with bull case upside of +50.5% and bear case downside of -10.0%.
What is the current trend for BWA?
BWA is in a bullish trend. Price ($60.97) is 26.2% above SMA 200 ($48.32). Bullish trend confirmed. The technical score is 90/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.