Borg Warner Downgraded at the Top (BWA)
BorgWarner Inc. (NYSE: BWA) is being downgraded at the top of its range. At $79.41, it has a 52-week range of $54.59 to $79.90. Today’s downgrade comes from Gabelli & Co. to HOLD from a prior BUY rating. This is a…
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BorgWarner Inc. (NYSE: BWA) is being downgraded at the top of its range. At $79.41, it has a 52-week range of $54.59 to $79.90. Today’s downgrade comes from Gabelli & Co. to HOLD from a prior BUY rating. This is a valuation call and it is one which is frankly hard to argue against because it has already gone so well.
The firm noted, “While we hold BWA management in high regard and expect the company to continue to outperform global auto industry growth over the next several years, margin of safety for investors has narrowed, as shares have appreciated nearly 25% already this year.”
Further noted:
- “it once again exhibited strong earnings, with 4Q adjusted EPS of $1.19 in line with our expectations. We’ve increased our FY12 EPS estimate to $5.70, from $5.40, to reflect higher drivetrain segment margins.”
- “At roughly $80, BWA shares trade at less than a 15% discount to our FY13 PMV estimate of $93 (based on 7.5x 2013 EBITDA). At current prices, we are willing to wait for a more attractive re-entry point.”
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
