BorgWarner jumps after Morgan Stanley upgrades to overweight
BWA•BorgWarner shares rose 5.3% premarket after Morgan Stanley upgraded the stock to overweight from equal-weight and raised its price target to $95 from $71. The brokerage cited resilient demand for gasoline and hybrid vehicles and potential growth from the company’s data-center power generator business.
1. Upgrade and price target
Morgan Stanley raised its rating on BorgWarner to overweight from equal-weight and its price target to $95 from $71. The new target was about 58% above the stock’s $60.26 last close.
2. Potential growth drivers
The brokerage said a slower-than-expected shift to electric vehicles and resilient demand for gasoline-powered and hybrid vehicles could support BorgWarner’s earnings outlook. It said the company’s emerging data-center power generator business could become a new source of growth and higher-margin earnings.
3. Adoption risk
Morgan Stanley expects contracting activity to accelerate into 2027, but said overcoming the hurdle of initial customer adoption remains a risk. Twelve of 16 brokerages rate the stock buy or higher, while four rate it hold; the median price target is $80. BorgWarner shares were up 33.7% year to date as of the last close.
