BorgWarner Inc (BWA) Fair Value & Analysis

Consumer Cyclical · US · Market cap $12.8B · ISIN US0997241064

What is BorgWarner Inc really worth?

BorgWarner Inc BWA · US

Price$65.73

Fair Value$42.74

Upside−35.0%

Quality68/100

A solid business, but trading 54% above our fair value of $42.74.

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Strengths

✓Moderate debt · generates free cash flow

Risks

!Mixed Growth (revenue 5y +7.1 %/yr)

!Thin margins · 2.5% net margin

!Mixed vs. peers (7/15)

!Narrow moat 42/100

!Evidence only medium, so the estimate is less certain

!Weak on future: 3 out of 100

!Weak on past: 29 out of 100

For context

·0.94% dividend yield

Evidence: Medium Range $32.05 – $53.43

Fair value as of: Aug 29, 2026

From 26 valuation models · updated 7 days ago

Fair value updated Aug 29, 2026, revised from $29.71 to $42.74 (+43.9%) since Aug 27, 2026. Share price +4.3% over the past month.

What runs behind every stock

26 valuation models 8 families, DCF to NCAV 37 quality factors margins, balance sheet, cashflow, debt 6 AI factors moat, what no ratio measures 2,000+ data points verified, per stock, median

69 individual criteria per stock, every one traceable See the method →

What matters now

The price sits above even our optimistic bull case ($53.43). The favourable scenario is already priced in.
Solid but not exceptional quality (68/100) and above fair value, neither a clear bargain nor a standout compounder.

Price vs Fair Value (5 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 29, 2026.

How to read this chart

60‑month range $24.43 – $77.03 · fair‑value band $32.05 – $53.43 · the $65.73 price screens above the $42.74 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 29, 2026.

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Analysis

BorgWarner Inc (BWA) currently trades at $65.73, while our model-based Fair Value estimate is $42.74, implying the stock looks roughly 53.8% overvalued today. The Quality Score stands at 68/100 (solid quality), in the Consumer Cyclical sector. Bull case: the Growth DCF group reads highest at a median of $88.62 per share, and 10 of the 26 models we run sit above the $65.73 price. Bear case: the Dividend Discount group reads lowest at $9.17, and 16 of the 26 models stay below the price. Evidence for this calculation is medium.

Over the trailing twelve months, BorgWarner Inc generated revenue of $14.3B at a net margin of 2.5%. Revenue grew 0.5% year over year. It earns a return on equity of 7.3%. Net debt stands at $1.9B. Fundamentals as of Aug 29, 2026

Our scenario range runs from $32.05 (bear case) to $53.43 (bull case); at $65.73, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The last reported earnings sit well below what analysts expect (earnings in transition, for example after write-downs or an earnings dip); whether the stock is cheap or expensive hinges on the expected recovery actually arriving. Read the fair value with that caveat. The share trades about 17% below its 52-week high and 107% above its 52-week low, currently above its 200-day average. For context, the median of 10 Consumer Cyclical peers we cover trades at −38% fair-value upside, at −35%, BWA screens cheaper than that median.

Fair Value models

This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly $0.7474 per share, which is 1.7 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.

Model Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence

Highest evidence

FCF DCF $59.10 $99.24 $162.04 78

Growth DCF $59.95 $94.91 $145.91 77

Residual Income $20.45 $20.78 $20.07 76

All 26 models by family

DCF Models

FCF DCF $59.10 $99.24 $162.04 78

Owner Earnings $22.15 $40.10 $68.17 74

5Y Revenue Exit $52.17 $88.65 $135.51 71

5Y EBITDA Exit $67.93 $118.67 $178.62 74

5Y P/E Exit $28.32 $43.20 $58.50 71

10Y Revenue Exit $52.20 $86.40 $133.14 66

10Y EBITDA Exit $64.14 $107.45 $166.62 67

10Y P/E Exit $38.71 $54.53 $73.34 64

Earnings-Based

Graham-Dodd $9.18 $31.16 $41.79 64

Lynch FV $7.14 $10.20 $13.25 61

PEG = 1.0 $7.14 $10.20 $13.25 57

EPV $44.95 $53.72 $61.40 74

Dividend Discount

Gordon GGM $5.33 $11.08 $17.57 66

DDM Multi-Stage $5.33 $9.17 $11.62 66

Multiples

P/E Multiple $22.28 $29.71 $37.14 63

P/S Multiple $17.22 $22.96 $28.70 58

P/B Multiple $17.22 $22.96 $28.70 55

EV/EBIT $79.37 $108.39 $137.42 66

EV/EBITDA $81.89 $111.76 $141.62 67

EV/Revenue $50.92 $76.05 $101.17 53

Asset-Based

NCAV (Graham) $13.27 $17.78 $26.53 54

Growth DCF

Growth DCF $59.95 $94.91 $145.91 77

Rev-Margin DCF $52.17 $88.62 $131.55 72

Economic Profit

Residual Income $20.45 $20.78 $20.07 76

ROIC Compounder $48.90 $65.16 $85.11 72

Growth Earnings

Growth-Adj P/E $18.90 $27.00 $35.10 67

Widest divergence: Growth DCF ($88.62) versus Dividend Discount ($9.17). Highest evidence: FCF DCF (78).

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Key figures & financial health

P/E ratio 38.2

P/S ratio 0.74 P/E × margin

EPS (TTM) $1.72 price ÷ EPS = P/E 38.2

Dividend yield 0.9% payout 36.0%

Net margin 1.9% FY2025

Return on equity 7.3% TTM

More key figures

Profitability

Return on assets (EBIT) 8.2% avg 5y

Operating margin 9.9% TTM

Growth

Revenue (TTM) $14.3B TTM

Revenue growth (YoY) +0.5% 3y avg +4.3%

EPS growth (YoY) +61.1%

Balance sheet & cash flow

Free cash flow $1.2B FY2025

Net debt $1.9B FY2025 · ≈ 1.6 yrs of FCF

Figures from reported company fundamentals · as of Aug 29, 2026. TTM = trailing twelve months.

Quality Score breakdown

Overall quality 68/100

Of which business quality 67 · Market factors (momentum, volatility) 65

Profitability 38

Margins and returns on capital today

Quality Growth 47

Are margins and returns improving?

Cashflow 63

Earnings quality: real cash, not paper profit

Fin. Strength 75

Balance sheet, leverage, solvency risk

Investment 98

Disciplined investing over empire-building

Low Volatility 51

Calm price path (market factor)

Momentum 65

Price trend over the last 3–12 months (market factor)

52W Momentum 82

Distance to the 52-week high (market factor)

Net Issuance 100

Buybacks instead of dilution

Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.

All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.

About the company

Full company description

BorgWarner Inc., together with its subsidiaries, provides technology solutions for combustion, hybrid, and electric vehicles worldwide. The company operates through the Turbos & Thermal Technologies; Drivetrain & Morse Systems; PowerDrive Systems; and Battery & Charging Systems segments. It offers turbochargers, eBoosters, eTurbos, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery heaters, and battery cooling systems. The company also provides chain systems and variable camshaft phasing products; friction and mechanical products for automatic transmissions, including dual clutch modules, friction clutch modules, electromagnetic clutches, friction and separator plates, transmission bands, torque converter clutches, one-way clutches, and torsional vibration dampers; hydraulic controls products for automatic transmissions, such as electro-hydraulic solenoids for standard and hydraulic systems, transmission solenoid modules and dual clutch hydraulic control modules; and torque management products comprising transfer cases and couplings; electronic limited slip differentials, electric torque vectoring products, and axle disconnect systems. In addition, it offers power electronics, including inverters, onboard chargers, DC/DC converters, and combination boxes; rotating electric machines comprising eMotors and generators; fully integrated drive modules consisting of inverters and gear reducers; and electronic controls, such as engine control units, transmission control units, battery management systems, propulsion controllers, and domain controllers. Further, the company provides battery and charging systems, including nickel manganese cobalt battery packs and lithium iron phosphate battery packs. BorgWarner Inc. was formerly known as Borg-Warner Automotive, Inc. The company was founded in 1928 and is headquartered in Auburn Hills, Michigan.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

BorgWarner Inc reported revenue of $14.3B in FY2025 versus $14.8B in FY2021, a compound −0.9%/yr. Reported net income was $277M in FY2025, compounding −15.3%/yr from FY2021.

Growth Quality 74/100

Revenue is growing, but margins or cash flow do not fully confirm the trend.

Latest Revenue (FY 2025)

$14.3B

Latest YoY

+1.7%

Avg. revenue growth/yr (3Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+4.3%

Avg. revenue growth/yr (5Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+7.1%

Avg. revenue growth/yr (33Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+8.7%

Value creation/yr (5Y) ⓘEarnings growth per share (CAGR 5 years, EBIT basis) plus dividend yield: value created per share and year.

+2.0% (1.1 + 0.9)

Revenue −0.9%/yr

FY21 $14.8B

FY22 $12.6B

FY23 $14.2B

FY24 $14.1B

FY25 $14.3B

Net income −15.3%/yr

FY21 $537M

FY22 $944M

FY23 $625M

FY24 $338M

FY25 $277M

Character of growth · EPS growth decomposed (2014-2025) −1.3 % p.a.

Revenue per share +5.8 %

of which total revenue +5.9 % · buybacks/dilution −0.1 %

EBIT margin −4.0 %

Tax rate −0.3 %

Residual (interest, one-offs) −2.6 %

Annual growth per factor. These are factors, not summands: multiplied they give the EPS growth rate, added they do not quite. Start and end points are 3-year averages (details on hover).

BWA screens 54% overvalued. Compare with O'Reilly Automotive, Inc →

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BorgWarner Inc · Fair Value
$42.74 −54%Fair Value
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Cite: Fair Value Calculator (2026). "BorgWarner Inc Fair Value". https://www.fairvalue-calculator.com/stock/BWA

Peer Group

Auto Parts · 640 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Quality Score 68 · Top 25%

Fair Value upside −35% · Below median

Return on equity (TTM) 7% · Above median

Return on assets 6% · Top 25%

Net margin (TTM) 3% · Below median

Operating margin (TTM) 10% · Above median

Revenue growth 1% · Below median

Dividend yield (TTM) 0.9% · Below median

Debt / equity 0.72× · Higher than 75% of peers

Valuation Multiples vs Auto Parts median · lower = cheaper

P/E (TTM) 38.2× · Pricier than median

P/B 2.35× · Pricier than median

P/S (TTM) 0.89× · Cheaper than median

P/FCF 10.9× · Pricier than 75% of peers

EV/EBITDA 7.2× · Cheaper than median

PEG 0.53× · Cheaper than 75% of peers

Strength profile in five axes (Snowflake)

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

This stock

Sector peers

VALUE0 · sector 14

FUTURE3 · sector 21

PAST29 · sector 28

HEALTH64 · sector 95

DIVIDEND19 · sector 32

VALUE 0: the price sits above our fair-value range.

Insider activity: 42/100

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

None of the checked exposures detected

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Frequently asked questions

Is BorgWarner Inc (BWA) overvalued or undervalued?

As of Aug 29, 2026, our model estimates a fair value of $42.74 versus a price of $65.73, about −35% upside (overvalued).

What is the fair value of BWA?

Our model-based fair value for BorgWarner Inc is $42.74 (as of Aug 29, 2026), built from audited fundamentals. The current price: $65.73.

What is the quality score of BWA?

BorgWarner Inc has a Quality Score of 68/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.

What is the revenue of BorgWarner Inc (BWA)?

BorgWarner Inc reported trailing-twelve-month revenue of about $14.3B (latest available figure, as of Aug 29, 2026).

What is the net profit margin of BWA?

The net profit margin of BorgWarner Inc is about 2.5%, meaning it keeps roughly 2.5% of revenue as net income. Based on the latest reported figures.

Does BorgWarner Inc pay a dividend?

BorgWarner Inc currently shows a dividend yield of about 0.94% relative to its recent price (as of Aug 29, 2026).

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