Here's Why BorgWarner (BWA) is a Strong Value Stock

In This Article:

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

BorgWarner (BWA)

Michigan-based BorgWarner, Inc. is a global leader in clean and efficient technology solutions required for combustion, hybrid and electric vehicles. Its products include four-wheel-drive and all-wheel-drive transfer cases (primarily for light trucks and sport utility vehicles or SUVs), as well as automatic transmission and timing chain systems. These products are aimed at improving vehicle performance, propulsion efficiency, stability and air quality. These products are produced and sold worldwide, primarily to OEMs of passenger cars, SUVs, trucks and commercial transportation products.

BWA is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of B. Shares are currently trading at a forward P/E of 8.4X for the current fiscal year compared to the Automotive - Original Equipment industry's P/E of 13.4X. Additionally, BWA has a PEG Ratio of 0.7 and a Price/Cash Flow ratio of 5.5X. Value investors should also note BWA's Price/Sales ratio of 0.5X.

A company's earnings performance is important for value investors as well. For fiscal 2024, two analysts revised their earnings estimate higher in the last 60 days for BWA, while the Zacks Consensus Estimate has increased $0.03 to $4.13 per share. BWA also holds an average earnings surprise of 13.8%.

Investors should take the time to consider BWA for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BorgWarner Inc. (BWA) : Free Stock Analysis Report