7. BorgWarner Inc. (NYSE:BWA)
Forward P/E: 8.85
On March 6, UBS analyst Joseph Spak upgraded BorgWarner Inc. (NYSE:BWA) to Neutral from Sell with a price target of $55. The analyst indicated that the stock now more appropriately reflects the probability and timing of success for the company’s emerging TurboCell opportunity in data-center power generation. The technology could provide a new avenue of growth beyond BorgWarner’s traditional automotive components business, particularly as demand for power solutions tied to artificial intelligence infrastructure expands.
On February 11, BorgWarner Inc. (NYSE:BWA) reported its fourth-quarter and full-year results. The company generated approximately $14.3 billion in net sales during 2025, representing an increase of about $200 million compared with the prior year. Adjusted earnings per share rose 14% year over year, and full-year free cash flow exceeded $1.2 billion, representing a roughly 66% increase from 2024. BorgWarner returned approximately 52% of its 2025 free cash flow to shareholders—about $630 million—through share repurchases and other capital returns. The company repurchased $400 million worth of shares during 2025 and still has $600 million remaining under its repurchase authorization. Since 2021, BorgWarner has repurchased about 31 million shares, reducing its share count by roughly 13%.
Looking ahead, BorgWarner Inc. (NYSE:BWA)’s 2026 guidance calls for total sales of between $14.0 billion and $14.3 billion compared with $14.3 billion in 2025. The company expects about a $200 million benefit from foreign exchange movements, while underlying end markets are projected to be flat to down roughly 3%. Light-vehicle markets—representing more than 80% of the company’s revenue—are expected to perform broadly in line with overall industry trends. Organic sales are projected to decline between 3.5% and 1.5%, including a roughly 150-basis-point headwind related to lower battery sales. Adjusted operating margins are expected to range from 10.7% to 10.9%, roughly in line with 2025 levels, including a modest benefit from exiting the charging business and cost control measures that help offset lower revenue. Adjusted earnings per share are projected to reach between $5.00 and $5.20 per diluted share, representing approximately 4% growth at the midpoint.
BorgWarner Inc. (NYSE:BWA) is a global automotive supplier headquartered in Auburn Hills, Michigan. The company develops technologies designed to improve efficiency and performance in combustion, hybrid, and electric vehicles. Seventh in the list of 12 best very cheap stocks to buy in 2026, BorgWarner operates in 24 countries and produces components including turbochargers, electric propulsion modules, and advanced battery systems used by automakers around the world.
