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Should You Buy BorgWarner Inc (BWA) At $51.68?

Let’s talk about the popular BorgWarner Inc (NYSE:BWA). The company’s shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at BWA’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for BWA

What’s the opportunity in BWA?

BWA appears to be overvalued by 37% at the moment, based on my discounted cash flow valuation. The stock is currently priced at $51.68 on the market compared to my intrinsic value of $37.83. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since BWA’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much BWA moves relative to the rest of the market.

What does the future of BWA look like?

NYSE:BWA Future Profit Nov 17th 17
NYSE:BWA Future Profit Nov 17th 17

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at BWA future expectations. BWA’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in BWA’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BWA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on BWA for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for BWA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on BorgWarner. You can find everything you need to know about BWA in the latest infographic research report. If you are no longer interested in BorgWarner, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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