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BorgWarner (BWA) Stock Sinks As Market Gains: What You Should Know

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BorgWarner (BWA - Free Report) closed at $46 in the latest trading session, marking a -0.33% move from the prior day. This change lagged the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq gained 0.61%.

Prior to today's trading, shares of the auto parts supplier had gained 2.01% over the past month. This has lagged the Auto-Tires-Trucks sector's gain of 22.47% and the S&P 500's gain of 4.86% in that time.

Investors will be hoping for strength from BorgWarner as it approaches its next earnings release, which is expected to be August 2, 2023. On that day, BorgWarner is projected to report earnings of $1.13 per share, which would represent year-over-year growth of 7.62%. Meanwhile, our latest consensus estimate is calling for revenue of $4.35 billion, up 15.77% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.68 per share and revenue of $17.54 billion, which would represent changes of +1.74% and +10.98%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BorgWarner. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.72% lower. BorgWarner is currently a Zacks Rank #3 (Hold).

Digging into valuation, BorgWarner currently has a Forward P/E ratio of 9.86. This valuation marks a discount compared to its industry's average Forward P/E of 15.53.

It is also worth noting that BWA currently has a PEG ratio of 0.7. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Automotive - Original Equipment industry currently had an average PEG ratio of 0.7 as of yesterday's close.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 125, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BWA in the coming trading sessions, be sure to utilize Zacks.com.


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