BorgWarner Downgraded, $55 Price Target Signals Limited 10% Upside
UBS cut BorgWarner to Sell, lifting its price target to $55 and arguing that TurboCell growth is already priced in. It forecasts a 1% drop in core revenue and a $210 million battery sales decline in 2026, versus $300 million in TurboCell sales in 2027 with upside to $1.5 billion by 2030.
1. UBS Rating Change
UBS downgraded BorgWarner from Neutral to Sell and raised its price target to $55, stating that current share prices already factor in strong expectations for the TurboCell data center power unit. The firm projects roughly 10% additional upside under an optimistic scenario but views that potential as insufficient given execution risks.
2. 2026 Financial Outlook
The bank forecasts a 1% decline in Foundational and eProducts revenue in 2026, alongside a $210 million, or 1.5%, drop in battery segment sales. In contrast, TurboCell is expected to generate $300 million in revenue in 2027 based on 2 GW of initial capacity, with scope to scale to $1.5 billion by 2030, though UBS models a slower ramp to about $750 million.
3. Execution and Commercialization Risks
TurboCell remains in development with no large-scale turbine production track record, limited public detail on pricing and specifications, and a battery component that increases customer costs without contributing to BorgWarner revenue. These factors raise questions about the company’s ability to meet the 2027 sales target and manage execution challenges.