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How Investors Are Reacting To BorgWarner (BWA) Balancing Higher 2025 Guidance With A Cautious EV Outlook

Simply Wall St · 5d ago
  • Morgan Stanley previously lowered its rating on BorgWarner to Equal Weight while the company simultaneously raised its 2025 financial performance estimates, citing higher industrial production and favorable foreign exchange despite ongoing production delays in North America and Europe.
  • The combination of a cautious outlook for electric vehicles through 2026 and management’s improved near-term guidance highlights BorgWarner’s reliance on internal combustion and hybrid powertrains as a key earnings pillar.
  • Now we’ll examine how BorgWarner’s upgraded 2025 guidance, set against a cautious EV outlook, reshapes its existing investment narrative.

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BorgWarner Investment Narrative Recap

To own BorgWarner, you need to believe it can manage a gradual shift from combustion and hybrid powertrains toward electrified systems without eroding earnings. Morgan Stanley’s downgrade but higher target and BorgWarner’s upgraded 2025 guidance do not materially change the key near term catalyst, which remains execution on its hybrid and EV backlog, or the main risk, which is prolonged weakness or delays in electrification demand.

The most relevant recent announcement is BorgWarner’s July 31, 2025 guidance raise, which lifted 2025 net sales expectations to US$14.0 billion to US$14.4 billion and slightly increased margin and earnings targets. Set alongside a cautious EV outlook, this firmer guidance puts more weight on how resilient its combustion and hybrid businesses are over the next couple of years while the Battery and Charging Systems segment works through demand and margin pressures.

But beneath this improved 2025 guidance, investors should be aware of the longer term risk that...

Read the full narrative on BorgWarner (it's free!)

BorgWarner's narrative projects $16.0 billion revenue and $1.0 billion earnings by 2028. This requires 4.4% yearly revenue growth and about a $780 million earnings increase from $220.0 million today.

Uncover how BorgWarner's forecasts yield a $50.08 fair value, a 7% upside to its current price.

Exploring Other Perspectives

BWA 1-Year Stock Price Chart
BWA 1-Year Stock Price Chart

Two members of the Simply Wall St Community currently see BorgWarner’s fair value between US$50.08 and US$70.29 per share, showing a wide spread of opinions. When you set that against BorgWarner’s continued dependence on internal combustion and hybrid platforms during a cautious EV period, it underlines why many investors want to compare several viewpoints before deciding how this transition might affect future performance.

Explore 2 other fair value estimates on BorgWarner - why the stock might be worth as much as 51% more than the current price!

Build Your Own BorgWarner Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.