BorgWarner stock rating upgraded to Outperform by Baird on hybrid growth

Investing.com - Baird has upgraded BorgWarner (NYSE:BWA) from Neutral to Outperform and raised its price target to $52.00 from $41.00. The stock, currently trading at $42.66, has shown impressive momentum with a 49% gain over the past six months, according to InvestingPro data.

The research firm cited BorgWarner’s "cyclical torque plus favorable leverage to hybrids" as key factors in the upgrade decision, identifying hybrid technology as the "most likely outgrowth catalyst" for the automotive parts supplier. This optimism is reflected in analyst sentiment, with 12 analysts recently revising their earnings expectations upward.

Baird also highlighted BorgWarner’s "consistently positive execution/margin trends," noting that the company has demonstrated well-managed expectations in its financial performance.

The firm pointed to "potential valuation buoyancy" as another factor supporting the more positive outlook on the stock, suggesting room for share price appreciation.

Baird mentioned BorgWarner’s "interesting capital allocation" decisions as an additional positive element, specifically referencing the company’s "recent charging exit" and expressing a preference for "increased repurchases all else equal." The company has maintained dividend payments for 13 consecutive years, demonstrating consistent shareholder returns.

In other recent news, BorgWarner Inc. reported its financial results for the second quarter of 2025, surpassing market expectations. The company achieved earnings per share of $1.21, outperforming the anticipated $1.08. Additionally, BorgWarner reported revenues of $3.64 billion, exceeding the forecasted $3.6 billion. These results reflect the company’s strong performance during the quarter. BorgWarner’s revised full-year guidance further indicates a positive outlook for the remainder of the year. The announcement has drawn attention from analysts and investors alike, highlighting the company’s ability to deliver solid financial results. These recent developments underscore BorgWarner’s position in the market and its ongoing financial health.

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