Should You Buy Borgwarner Inc (BWA) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Buy
Latest Price
48.930
1 Day change
1.35%
52 Week Range
49.210
Analysis Updated At
2026/01/28
BorgWarner (BWA) is a BUY right now for a beginner long-term investor with $50k–$100k. The stock is in a constructive uptrend (bullish moving-average stack) and options positioning is strongly call-skewed (bullish sentiment). While profitability fell YoY last quarter and recent analyst actions include a couple of downgrades, the business is still showing revenue growth and improving gross margin, and the current price (~48.37) is close to support/pivot rather than extended.
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Technical Analysis
Trend is moderately bullish but short-term momentum is mixed.
- Price: 48.37 (-0.37% today) with market roughly flat (S&P 500 -0.1%).
- Moving averages: Bullish alignment (SMA_5 > SMA_20 > SMA_200) suggests the broader trend is up.
- MACD: Histogram -0.0754 and negatively expanding → momentum has weakened recently (near-term consolidation/pullback risk).
- RSI(6): 57.07 (neutral) → not overbought; room to move either way.
- Key levels: Pivot 47.698 is the near-term “line in the sand.” Resistance levels are R1 48.703 and R2 49.323; supports S1 46.693 and S2 46.073. At 48.37, the stock is just below first resistance, so an immediate breakout is possible, but it’s not far from the pivot if it chops lower.
- Pattern-based forward odds (provided): slight weakness next week (-1.63%) but positive 1-month bias (+1.74%)—consistent with a long-term entry being reasonable even if near-term is choppy.
Options Data
Bullish
Open Interest Put-Call Ratio
Bullish
Option Volume Put-Call Ratio
Options sentiment is notably bullish/positioned for upside:
- Open interest put/call ratio: 0.16 (very call-heavy).
- Daily volume put/call ratio: 0.02 (overwhelmingly call volume today).
- Implied vol (30D) 46.81 vs historical vol 23.74: options are priced for larger moves than recent realized volatility.
- IV percentile 55.6 / IV rank 28.49: volatility is not at extreme highs vs its own history, but still elevated vs realized.
Interpretation: positioning and flow skew bullish, suggesting traders are leaning upside; elevated IV also implies the market expects movement (not necessarily direction), but the put/call skew is clearly optimistic.
Technical Summary
Sell
3
Buy
9
Positive Catalysts
Technical trend support: bullish moving-average structure indicates the longer trend is still up.
Options sentiment: extremely low put/call ratios (both OI and volume) point to bullish trader bias.
Operations: 2025/Q3 revenue grew +4.12% YoY and gross margin improved to 18.96% (+2.82% YoY), indicating pricing/mix and execution improvements.
Upcoming earnings catalyst: QDEC 2025 earnings on 2026-02-11 (pre-market) can be a positive re-rating event if margins/FCF hold up.
Sell-side positives still exist: Outperform ratings and price targets up to ~$53–$54 remain on the tape (Evercore, Baird), implying upside from current levels if execution continues.
Neutral/Negative Catalysts
Momentum cooling: MACD histogram is negative and deteriorating, increasing odds of near-term chop/pullback.
Profitability decline: 2025/Q3 net income -32.48% YoY and EPS -29.81% YoY—could keep valuation multiples capped until earnings prove a rebound.
Analyst downgrades: Piper Sandler downgraded to Neutral (PT $
and Morgan Stanley to Equal Weight (PT $
citing valuation and a cautious EV outlook (“EV winter”).
No fresh news tailwinds: no notable positive news flow in the last week to force near-term upside.
Positioning risk: very bullish options skew can backfire if earnings or guidance disappoints, as optimism may already be priced into near-term expectations.
Financial Performance
Latest reported quarter: **2025/Q3**
- Revenue: 3.591B, **+4.12% YoY** (top-line growth remains intact).
- Net income: 158M, **-32.48% YoY**.
- EPS: 0.73, **-29.81% YoY**.
- Gross margin: **18.96%**, **+2.82% YoY**.
Takeaway: Growth is present and gross margin improved, but earnings power weakened materially YoY. For a long-term buyer, the key question is whether margin gains translate into bottom-line recovery over the next few quarters (next major checkpoint is QDEC 2025 earnings on 2026-02-11).
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
Recent trend: mixed-to-slightly more cautious.
- 2026-01-08: Piper Sandler downgraded to Neutral (PT $51 from $52) on valuation.
- 2025-12-08: Morgan Stanley downgraded to Equal Weight (PT $49 from $42) with a more cautious 2026 outlook; noted “EV winter” through 2026.
- 2025-11-24: Evercore kept Outperform and raised PT to $53.
- 2025-10-31: Baird kept Outperform and raised PT to $54.
- 2025-11-03: TD Cowen kept Hold and nudged PT to $45.
Wall Street pros view: strong operational execution and industry replacement demand/hybrid/ICE resilience support the bull case; the bear case centers on valuation sensitivity and uncertainty around EV adoption timing plus the recent YoY earnings decline.
Other flow/ownership notes from provided data: Hedge funds neutral; insiders neutral; no recent congress trading data available; no politician/influential-figure trading data provided.
Wall Street analysts forecast BWA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BWA is 51.5 USD with a low forecast of 45 USD and a high forecast of 55 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
Wall Street analysts forecast BWA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BWA is 51.5 USD with a low forecast of 45 USD and a high forecast of 55 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Buy
3 Hold
0 Sell
Moderate Buy
Current: 48.280
Low
45
Averages
51.5
High
55
Current: 48.280
Low
45
Averages
51.5
High
55
Piper Sandler
Overweight -> Neutral
downgrade
$52 -> $51
AI Analysis
2026-01-08
Reason
Piper Sandler
Price Target
$52 -> $51
AI Analysis
2026-01-08
downgrade
Overweight -> Neutral
Reason
Piper Sandler downgraded BorgWarner to Neutral from Overweight with a price target of $51, down from $52. The firm cites valuation for the downgrade. BorgWarner remains well positioned to grow revenue modestly, regardless of uncertainty in market-wide drivetrain mix, the analyst tells investors in a research note.
Morgan Stanley
Overweight -> Equal Weight
downgrade
$42 -> $49
2025-12-08
Reason
Morgan Stanley
Price Target
$42 -> $49
2025-12-08
downgrade
Overweight -> Equal Weight
Reason
Morgan Stanley downgraded BorgWarner to Equal Weight from Overweight with a price target of $49, up from $42, following a change in analysts. The firm adjusted ratings in the autos and shared mobility group as part of its 2026 outlook. Morgan Stanley is "leaning more cautious" into next year, saying the electric vehicle "winter" will sustain through 2026. This is counterbalanced by a "moderately more positive" outlook on internal combustion engines and hybrids, the analyst tells investors in a research note.
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