BorgWarner is a product leader in highly engineered components and systems for powertrains around the world. The company was founded in 1987 and is based in Auburn Hills, Michigan.
BWA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Borgwarner Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Borgwarner Inc ranked in the 46th percentile in terms of potential gain offered. The most interesting components of our discounted cash flow analysis for Borgwarner Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 14.89 -- which is good for besting 87.32% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
Borgwarner Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 11.78% of tickers in our DCF set.
BWA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 11.78% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CHUY, KSS, TALN, IHG, and LOCO can be thought of as valuation peers to BWA, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
The board of directors of BorgWarner Inc. (NYSE: BWA) declared a quarterly cash dividend of $0.17 per share of common stock. The dividend is payable on September 15, 2020 to shareholders of record on September 1, 2020.
BorgWarner has started supplying its high-performance, lightweight, and compact electric drive module (eDM) to power three Chinese new energy vehicles (NEVs): the JMC-Ford Territory, the AIWAYS SUV U5 and the Leading Ideal One's smart electric large SUV without mileage anxiety. With a compact, lightweight, easy-to-install design, BorgWarner's eDM delivers the power desired for a pleasant driving experience. The flexible design of the eDM makes it the perfect solution for front- or rear-axle installation and enables a high level of system integration, performance, durability and maximum operational efficiency.