In a recent transaction, Stefan Demmerle, Vice President of BorgWarner Inc. (NYSE:BWA), sold 21,500 shares of common stock. The shares were sold at a weighted average price of $34.7943, with actual prices ranging from $34.7500 to $34.9600. This sale amounted to a total of $748,077. Following the transaction, Demmerle holds 227,512.69 shares directly. The transaction was executed on November 14, 2024, and reported on November 18, 2024.
In other recent news, BorgWarner reported third-quarter revenue of $3,449 million, slightly below market expectations, yet the company's earnings before interest and taxes (EBIT) reached $350 million, surpassing estimates. BorgWarner also announced several new business awards, including contracts for transfer cases with a North American OEM and a high-performance turbocharger for General Motors (NYSE:GM)' Chevrolet Corvette ZR1. JPMorgan adjusted its forecast for BorgWarner's adjusted EBIT in future years, leading to an increase in the price target to $51.
In a leadership transition, Joseph Fadool is set to succeed Frédéric Lissalde as President and CEO, following Lissalde's planned retirement in 2025. BorgWarner completed a $400 million stock repurchase program and projected a positive outlook for the full year, forecasting sales between $14.0 billion and $14.2 billion and an adjusted EPS of $4.15 to $4.30.
Despite a 5% year-over-year decline, BorgWarner managed to outperform the market, which saw a 6% decrease, and strengthened its adjusted operating margin to 10.1%. The company's battery segment sales grew by 36%, with the goal to break even as it scales. BorgWarner also plans to deploy $475 million to $575 million in free cash flow, primarily through share repurchases and dividends. These developments highlight BorgWarner's resilience in a challenging market and its strategic focus on cost management, new product awards, and a strong performance in the battery segment.
InvestingPro Insights
While Stefan Demmerle's recent sale of BorgWarner Inc. (NYSE:BWA) shares may raise eyebrows, it's essential to consider the broader financial context of the company. According to InvestingPro data, BorgWarner's stock is currently trading at a P/E ratio of 8.72, which is relatively low compared to its peers in the auto parts industry. This valuation metric aligns with one of the InvestingPro Tips, which notes that BWA is "Trading at a low earnings multiple."
Furthermore, the company's financial health appears robust, with an InvestingPro Tip highlighting that "Cash flows can sufficiently cover interest payments." This suggests that despite the insider sale, BorgWarner maintains a strong financial position. The company's commitment to shareholder returns is also evident, as it "Has maintained dividend payments for 12 consecutive years," according to another InvestingPro Tip.
It's worth noting that BorgWarner's market capitalization stands at $7.51 billion, reflecting its significant presence in the automotive supply industry. The company's revenue for the last twelve months as of Q3 2024 was $14.17 billion, with a gross profit margin of 18.52%. While this margin may be considered modest, it's important to contextualize it within the competitive landscape of the auto parts sector.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights, with 10 more tips available for BorgWarner. These tips could provide valuable context to the insider transaction and help investors make more informed decisions about the company's stock.
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