BorgWarner (NYSE:BWA) Announces Quarterly Earnings Results, Beats Expectations By $0.19 EPS

BorgWarner (NYSE:BWA) posted its quarterly earnings data on Wednesday. The auto parts company reported $1.35 EPS for the quarter, beating the consensus estimate of $1.16 by $0.19, FiscalAI reports. The business had revenue of $3.57 billion for the quarter, compared to the consensus estimate of $3.49 billion. BorgWarner had a return on equity of 16.72% and a net margin of 0.94%.BorgWarner’s revenue for the quarter was up 3.9% on a year-over-year basis. During the same quarter in the prior year, the business earned $1.01 earnings per share. BorgWarner updated its FY 2026 guidance to 5.000-5.200 EPS.

Here are the key takeaways from BorgWarner’s conference call:

• BorgWarner reported strong 2025 results with $14.3 billion in net sales, a 10.7% adjusted operating margin (up 60 bps), 14% EPS growth, and generated free cash flow >$1.2 billion, which management called an “outstanding” year.
• 2026 guidance calls for $14.0–$14.3 billion in sales (organic -3.5% to -1.5%), adjusted operating margin of 10.7%–10.9% and EPS of $5.00–$5.20, with free cash flow forecast at $900M–$1.1B as CapEx rises to support new launches.
• The company signed a master supply agreement for a new Turbine Generator System with TurboCell (Endeavour), expects production ramp in 2027 and forecasts > $300 million of revenue in the first year with mid‑teens incremental margin and immediate EPS accretion.
• Management flagged significant weakness in its battery business (citing ~35%–40% revenue decline year‑over‑year) that will be a ~150 basis point drag on 2026 sales; near‑term demand remains uncertain despite cost reduction actions.
• Continued shareholder returns—repurchased $400M in H2 2025, returned ~52% of 2025 FCF, repurchased ~31M shares since 2021 (13% fewer outstanding) and has ~$600M remaining on its buyback authorization.

BorgWarner Stock Up 21.3%

BWA stock traded up $11.48 during midday trading on Wednesday, hitting $65.46. 6,379,796 shares of the company’s stock were exchanged, compared to its average volume of 2,283,848. BorgWarner has a 12-month low of $24.40 and a 12-month high of $68.82. The company has a current ratio of 2.05, a quick ratio of 1.69 and a debt-to-equity ratio of 0.63. The stock has a market capitalization of $14.00 billion, a price-to-earnings ratio of 103.42, a price-to-earnings-growth ratio of 1.07 and a beta of 1.09. The firm has a 50 day moving average price of $46.80 and a 200-day moving average price of $44.08.

BorgWarner Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, March 16th. Shareholders of record on Monday, March 2nd will be issued a $0.17 dividend. The ex-dividend date is Monday, March 2nd. This represents a $0.68 dividend on an annualized basis and a yield of 1.0%. BorgWarner’s payout ratio is currently 107.94%.

Hedge Funds Weigh In On BorgWarner

A number of institutional investors have recently made changes to their positions in the business. Advisory Services Network LLC bought a new stake in BorgWarner during the 3rd quarter worth approximately $131,000. CIBC Private Wealth Group LLC grew its stake in shares of BorgWarner by 71.2% in the third quarter. CIBC Private Wealth Group LLC now owns 3,811 shares of the auto parts company’s stock worth $168,000 after purchasing an additional 1,585 shares during the last quarter. Moneta Group Investment Advisors LLC bought a new stake in shares of BorgWarner during the third quarter valued at approximately $229,000. Fiduciary Trust Co purchased a new position in shares of BorgWarner during the third quarter valued at approximately $240,000. Finally, EverSource Wealth Advisors LLC grew its stake in shares of BorgWarner by 400.5% in the second quarter. EverSource Wealth Advisors LLC now owns 5,531 shares of the auto parts company’s stock worth $185,000 after acquiring an additional 4,426 shares during the period. 95.67% of the stock is currently owned by institutional investors.

BorgWarner News Roundup

Here are the key news stories impacting BorgWarner this week:

• Positive Sentiment: Q4 earnings and revenue beat consensus — BorgWarner reported $1.35 EPS vs. ~ $1.15 consensus and revenue of $3.57B vs. $3.49B expected, showing year-over-year margin improvement and higher top-line. BorgWarner (BWA) Q4 Earnings and Revenues Top Estimates Press Release
• Positive Sentiment: Multiple OEM program awards boost medium/long-term EV content — BorgWarner won an 800V Integrated Drive Module (iDM) program with a premium European OEM (production 2029), expanded a global BMS program (800V-capable), secured a North American iDM + generator module contract and additional China 48V eXD and VTG turbocharger awards. These wins increase addressable content in EV/HEV platforms. iDM Europe BMS Expansion
• Positive Sentiment: Strategic diversification — BorgWarner signed a master supply agreement to supply modular turbine generator systems to a data-center developer (TurboCell/Endeavour), signaling new non-automotive revenue streams. Data Center Award
• Neutral Sentiment: FY2026 guidance roughly in line to slightly below consensus — management set EPS guidance at $5.00–$5.20 (consensus ~ $5.11) and revenue $14.0B–$14.3B (consensus ~ $14.4B). Guidance doesn’t materially raise the bar, so near-term upside may be limited absent acceleration. 2025 Results & 2026 Guidance
• Negative Sentiment: Valuation and margin context — despite the beat, BorgWarner trades at a high P/E (~101) and reported a low net margin (0.94%), leaving some investors cautious that the stock’s valuation already prices in significant future execution and EV content expansion. Metrics vs. Street

Analyst Ratings Changes

Several equities research analysts have weighed in on the company. Weiss Ratings reaffirmed a “hold (c)” rating on shares of BorgWarner in a research report on Wednesday, January 21st. UBS Group increased their target price on BorgWarner from $46.00 to $49.00 and gave the stock a “neutral” rating in a report on Wednesday, January 14th. Robert W. Baird set a $55.00 price target on shares of BorgWarner in a research report on Wednesday, January 14th. JPMorgan Chase & Co. raised their price objective on shares of BorgWarner from $45.00 to $53.00 and gave the company an “overweight” rating in a research report on Monday, October 20th. Finally, Wells Fargo & Company decreased their price target on shares of BorgWarner from $54.00 to $52.00 and set an “overweight” rating on the stock in a research note on Tuesday, December 9th. Eight analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. Based on data from MarketBeat.com, BorgWarner has an average rating of “Moderate Buy” and an average target price of $47.31.

About BorgWarner

BorgWarner Inc is a global automotive supplier specializing in propulsion and drivetrain solutions for combustion, hybrid and electric vehicles. The company’s product portfolio includes turbochargers, thermal management systems, transmission components, e-Propulsion modules and advanced fuel-efficiency technologies. BorgWarner serves original equipment manufacturers (OEMs) across passenger cars, light trucks and commercial vehicles, supporting both legacy internal-combustion engines and emerging electrification trends.

Founded in 1928 through the merger of several driveline companies, BorgWarner has grown through strategic acquisitions and continuous investment in research and development.