BWA - Embedded Expectations Analysis - 2020 03 27
ï€ BorgWarner Inc. (BWA:USA) currently trades at historical lows relative to UAFRS-based (Uniform) Earnings, with a 9.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about the Delphi acquisition, their revenue guidance, and their backlogï€ Specifically, management may have concerns about their backlog's product mix and their lower expected revenue in 2020. In addition, they may lack confidence in their ability to achieve forecast 500bps backlog outgrowth and total market outgrowth. Moreover, they may lack confidence in their ability to deliver enhanced returns with the Delphi acquisition and in their ability to execute on their focus pursuits with Delphi technology. Finally, they may have concerns about production in China, and they may be downplaying concerns about low backlog from Europe
BorgWarner is a holding company. Through its subsidiaries, the company is a global product provider in technology solutions for combustion, hybrid and electric vehicles. The company manufactures and sells these products worldwide, primarily to original equipment manufacturers of light vehicles (passenger cars, sport-utility vehicles, vans and light trucks). The company's segments are: Engine, which provides turbochargers, eBoosters, timing systems, emissions systems, thermal systems, gasoline ignition technology, cabin heaters, battery heaters and battery charging; and Drivetrain, which provides rotating electrical components, power electronics, clutching systems, control modules and all-wheel drive systems.
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