# BorgWarner (BWA.US)

Canonical: https://gigainvestors.com/s/BWA

Analysis as of: 2026-10-16T07:27:09.123Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $58.67 per share; close as of 2026-10-15.

Estimated value: low $40.51 per share, central $44.63 per share, high $50.12 per share. Buy at or below the central value $44.63 per share. Valuation as of 2026-10-16T07:27:09.123Z; scenarios are not confidence intervals.

Expected annual return: 7.9% at the stated quote. About 7.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.31×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.12×

- FY2018: 0.12×

- FY2019: 0.12×

- FY2020: 0.09×

- FY2021: 0.09×

- FY2022: 0.08×

- FY2023: 0.08×

- FY2024: 0.09×

- FY2025: 0.04×

- LTM to Jun 2026: 0.05×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 15.9%

- ROIC, second-lowest year: 9.5%

- Typical minus recent gross margin: 0.3 pp

- Typical gross margin (annual median): 19.0%

- Recent gross margin (lower of latest and 3-year median): 18.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.8%

- ROIC including acquisitions, ten-year median: 7.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 22.7%

- FY2018: 28.3%

- FY2019: 19.6%

- FY2020: 10.1%

- FY2021: 16.6%

- FY2022: 11.1%

- FY2023: 15.2%

- FY2024: 18.4%

- FY2025: 6.8%

- LTM to Jun 2026: 9.5%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.12×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.9B

- Net income, five-year total: $2.6B

- Return on incremental invested capital: -31.0%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 3.0 pp

- Working capital / revenue, final three-year average: 15.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.82×

- FY2023: 1.00×

- FY2024: 1.01×

- FY2025: 2.01×

- LTM to Jun 2026: 1.46×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 28.3% vs 15.2%

- Per-share earnings: 1.83 to 1.50 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.7%

- Ordinary dilution, 5-year annual growth: -2.3%

- Market cap gain: -$180M

- Cumulative retained earnings: $2.4B

- Diluted shares, 10-year annual growth: -1.7%

- Diluted shares, 5-year annual growth: -2.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -2.4%

- Per-share value change: -$0.33

- Per-share value, starting three-year median: $1.83

- Per-share value, ending three-year median: $1.50

- Buybacks concentrated in cheaper years (correlation): -0.27

- Average buyback yield: 2.5%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $1.9B

- Cumulative net income, 10 years: $5.5B

- ROIC, first three-year median: 28.3%

- ROIC, last three-year median: 15.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.48

- FY2017: $1.83

- FY2018: $3.91

- FY2019: $3.18

- FY2020: $2.06

- FY2021: $2.24

- FY2022: $3.99

- FY2023: $2.67

- FY2024: $1.50

- FY2025: $1.28

### accounting: pass

- Sloan accruals: -10.0%

- Receivables to sales index (DSRI): 1.02×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 4.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 5.95×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.45×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -10.4%

- FY2017: -7.6%

- FY2018: -1.9%

- FY2019: -2.7%

- FY2020: -4.5%

- FY2021: -4.6%

- FY2022: -3.7%

- FY2023: -4.7%

- FY2024: -7.2%

- FY2025: -10.0%

## Holders

- [John Rogers](https://gigainvestors.com/AI): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 5.2% a year for ten years · sales +0.2%

Story as of 2026-10-16T09:58:26.353Z; price observation 2026-10-15.

Price needs cash profits to grow 5.2% a year for ten years

- 2025-05-07: BorgWarner lifts annual sales forecast on stronger foreign currency, tariff-driven recovery ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/borgwarner-lifts-annual-sales-forecast-113052289.html))

- 2025-07-31: BORGWARNER INC (NYSE:BWA) Beats Q2 Earnings Estimates and Raises Full-Year Guidance ([chartmill.com](https://www.chartmill.com/news/BWA/Chartmill-31986-BORGWARNER-INC-NYSEBWA-Beats-Q2-Earnings-Estimates-and-Raises-Full-Year-Guidance))

- 2025-10-31: BorgWarner (BWA) Profit Margins Drop on $808 Million One-Off Loss, Testing Margin Recovery Narrative ([finance.yahoo.com](https://finance.yahoo.com/news/borgwarner-bwa-profit-margins-drop-111411287.html))

- 2026-02-11: BorgWarner Wins Electric Differential Contract, Signs Multiple Deals With OEMs ([finance.yahoo.com](https://finance.yahoo.com/news/borgwarner-wins-electric-differential-contract-145307828.html))

- 2026-05-06: Why BorgWarner (BWA) Is Up 5.4% After Q1 2026 Beat And New eMotor Wins ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-borgwarner-bwa-5-4-201956566.html))

### Sales · FY2025–2026

sales +0.2%; source https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm; observed 2026-02-11.

- FY2017: $9.8B 

- FY2018: $11B 

- FY2019: $10B 

- FY2020: $10B 

- FY2021: $15B 

- FY2022: $13B 

- FY2023: $14B 

- FY2024: $14B 

- FY2025: $14B 

- FY2026: $14B 

### Gross margin · FY2026

gross margin 19.5%; source https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm; observed 2026-02-11.

- FY2017: 21.6% 

- FY2018: 21.2% 

- FY2019: 20.7% 

- FY2020: 18.8% 

- FY2021: 19.3% 

- FY2022: 18.7% 

- FY2023: 18.1% 

- FY2024: 18.5% 

- FY2025: 18.7% 

- FY2026: 19.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto parts; annual sales are USD 14.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm (filed 2026-02-11); FY2025: revenue 14316000000; grossProfit 2674000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); BWA.US: 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.

### Why customers stay

Margins ranged from 18.1% to 18.7% during 2023–25; it earns 15.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: grossProfit / revenue = 18.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: grossProfit / revenue = 18.5%.

- Source: https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm (filed 2026-02-11); FY2025: grossProfit / revenue = 18.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); 10-year return on capital observations [[2017,0.22664031052328926],[2018,0.28284359680348625],[2019,0.1964189354917832],[2020,0.10103134643495208],[2021,0.16575633507688783],[2022,0.11117240044515413],[2023,0.15224887335833714],[2024,0.18431515808254112],[2025,0.06790099395829273],[2026,0.09464960886571057]]; median 0.15900260421761248. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 19% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm (filed 2026-02-11); Gross margin observations: [[2021,0.1926265417537238],[2022,0.18749505342303127],[2023,0.18087054514720383]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 508 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2016: growth capex 109200000; upkeep 391400000; owner earnings 118500000. Growth capex / owner earnings = 0.9215189873417722.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2017: growth capex 152000000; upkeep 408000000; owner earnings 439900000. Growth capex / owner earnings = 0.34553307569902253.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2018: growth capex 115000000; upkeep 431000000; owner earnings 930700000. Growth capex / owner earnings = 0.12356290963790695.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2019: growth capex 0; upkeep 481000000; owner earnings 704000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2020: growth capex 0; upkeep 501000000; owner earnings 529000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2021: growth capex 94000000; upkeep 574000000; owner earnings 537000000. Growth capex / owner earnings = 0.1750465549348231.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2022: growth capex 0; upkeep 723000000; owner earnings 773000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: growth capex 250000000; upkeep 582000000; owner earnings 625000000. Growth capex / owner earnings = 0.4.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: growth capex 0; upkeep 671000000; owner earnings 340000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm (filed 2026-02-11); FY2025: growth capex 0; upkeep 440000000; owner earnings 556000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Dividend observations: [[2016,113400000],[2017,124100000],[2018,142000000],[2019,140000000],[2020,146000000],[2021,162000000],[2022,161000000],[2023,130000000],[2024,98000000],[2025,119000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm (filed 2026-02-11); FY2025: cash repurchases 508000000 USD.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); BWA.US SharesStats.PercentInsiders = 0.614 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 5.2% yearly over ten years; actual growth was 6.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Ten-year compound average after fade. Initial solved rate 0.06187678528241436. Price 58.67; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.3755376690405499 → FY2025 2.569316081330869. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $35.84 per share

- 2016-11: $35.60 per share

- 2016-12: $39.44 per share

- 2017-01: $40.83 per share

- 2017-02: $42.19 per share

- 2017-03: $41.79 per share

- 2017-04: $42.28 per share

- 2017-05: $42.51 per share

- 2017-06: $42.36 per share

- 2017-07: $46.74 per share

- 2017-08: $46.41 per share

- 2017-09: $51.23 per share

- 2017-10: $52.72 per share

- 2017-11: $55.68 per share

- 2017-12: $51.09 per share

- 2018-01: $56.26 per share

- 2018-02: $49.08 per share

- 2018-03: $50.23 per share

- 2018-04: $48.94 per share

- 2018-05: $48.78 per share

- 2018-06: $43.16 per share

- 2018-07: $46.02 per share

- 2018-08: $43.77 per share

- 2018-09: $42.78 per share

- 2018-10: $39.41 per share

- 2018-11: $39.58 per share

- 2018-12: $34.74 per share

- 2019-01: $40.90 per share

- 2019-02: $40.61 per share

- 2019-03: $38.41 per share

- 2019-04: $41.77 per share

- 2019-05: $35.48 per share

- 2019-06: $41.98 per share

- 2019-07: $37.80 per share

- 2019-08: $32.63 per share

- 2019-09: $36.68 per share

- 2019-10: $41.68 per share

- 2019-11: $42.05 per share

- 2019-12: $43.38 per share

- 2020-01: $34.29 per share

- 2020-02: $31.60 per share

- 2020-03: $24.37 per share

- 2020-04: $28.57 per share

- 2020-05: $32.15 per share

- 2020-06: $35.30 per share

- 2020-07: $36.60 per share

- 2020-08: $40.59 per share

- 2020-09: $38.74 per share

- 2020-10: $34.98 per share

- 2020-11: $38.85 per share

- 2020-12: $38.64 per share

- 2021-01: $41.99 per share

- 2021-02: $45.00 per share

- 2021-03: $46.36 per share

- 2021-04: $48.58 per share

- 2021-05: $51.29 per share

- 2021-06: $48.54 per share

- 2021-07: $48.98 per share

- 2021-08: $42.68 per share

- 2021-09: $43.21 per share

- 2021-10: $45.07 per share

- 2021-11: $43.28 per share

- 2021-12: $45.07 per share

- 2022-01: $43.85 per share

- 2022-02: $41.01 per share

- 2022-03: $38.90 per share

- 2022-04: $36.83 per share

- 2022-05: $40.32 per share

- 2022-06: $33.37 per share

- 2022-07: $38.46 per share

- 2022-08: $37.70 per share

- 2022-09: $31.40 per share

- 2022-10: $37.53 per share

- 2022-11: $42.51 per share

- 2022-12: $40.25 per share

- 2023-01: $47.28 per share

- 2023-02: $50.28 per share

- 2023-03: $49.11 per share

- 2023-04: $48.13 per share

- 2023-05: $44.33 per share

- 2023-06: $48.91 per share

- 2023-07: $46.50 per share

- 2023-08: $40.75 per share

- 2023-09: $40.37 per share

- 2023-10: $36.90 per share

- 2023-11: $33.69 per share

- 2023-12: $35.85 per share

- 2024-01: $33.90 per share

- 2024-02: $31.13 per share

- 2024-03: $34.74 per share

- 2024-04: $32.77 per share

- 2024-05: $35.66 per share

- 2024-06: $32.24 per share

- 2024-07: $35.31 per share

- 2024-08: $34.07 per share

- 2024-09: $36.29 per share

- 2024-10: $33.63 per share

- 2024-11: $34.32 per share

- 2024-12: $31.79 per share

- 2025-01: $31.90 per share

- 2025-02: $29.77 per share

- 2025-03: $28.65 per share

- 2025-04: $28.38 per share

- 2025-05: $33.09 per share

- 2025-06: $33.48 per share

- 2025-07: $36.80 per share

- 2025-08: $42.76 per share

- 2025-09: $43.96 per share

- 2025-10: $42.96 per share

- 2025-11: $43.06 per share

- 2025-12: $45.06 per share

- 2026-01: $47.41 per share

- 2026-02: $57.57 per share

- 2026-03: $54.26 per share

- 2026-04: $56.97 per share

- 2026-05: $71.82 per share

- 2026-06: $66.40 per share

- 2026-07: $63.74 per share

- 2026-08: $64.16 per share

- 2026-09: $60.11 per share

- 2026-10: $58.67 per share

## Annual estimated value (USD per share)

- FY2016: low $23.65 per share, central $26.76 per share, high $30.91 per share

- FY2017: low $21.47 per share, central $24.23 per share, high $27.90 per share

- FY2018: low $24.40 per share, central $28.03 per share, high $32.23 per share

- FY2019: low $25.61 per share, central $30.95 per share, high $35.65 per share

- FY2020: low $29.74 per share, central $33.01 per share, high $37.38 per share

- FY2021: low $43.43 per share, central $50.70 per share, high $57.98 per share

- FY2022: low $42.54 per share, central $52.31 per share, high $60.47 per share

- FY2023: low $40.92 per share, central $47.24 per share, high $54.09 per share

- FY2024: low $38.20 per share, central $42.36 per share, high $47.89 per share

- FY2025: low $37.45 per share, central $41.32 per share, high $46.48 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm); period 2025-12-31, filed 2026-02-11.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.