BorgWarner, Inc.: Powering Up; Upgrade to Buy, $95 PT
Report Coverage
- Broker
- UBS
- Region
- United States
- Sector
- Information Technology, Machinery & Equipment, Utilities, Electrical Equipment
- Report Type
- Market Report
- Primary Focus
- Non-auto growth opportunities and valuation re-rating
Report Summary
UBS upgrades BorgWarner to Buy with a $95 price target (from $61), seeing the company as the auto supplier best positioned to benefit from non-auto opportunities including power generation, battery energy storage systems (BESS), and 800V power electronics. By 2030, UBS estimates ~23% of revenue and ~30% of EBIT will come from non-auto sources, supporting ~19% EPS CAGR (2027-30) and multiple expansion. The TurboCell micro-turbine generator alone could represent a ~$4bn revenue opportunity by 2030.
Key Takeaways
- Upgrade to Buy with $95 PT (from $61, Neutral); UBS sees BWA as the supplier best positioned for non-auto opportunities in power generation, BESS, and 800V power electronics.
- TurboCell micro-turbine generators: initial 2GW capacity with expansion to 4GW by 2030; at $1,100/kW and ~90% utilization, revenue opportunity could reach ~$4bn by 2030.
- BESS opportunity estimated at ~2.5GWh of US capacity worth ~$625mm in sales; company actively quoting with 2 potential customers and has sent microgrid inverter samples to 4 customers.
- Non-auto revenue/EBIT to reach ~23%/~30% of total by 2030, driving ~19% EPS CAGR (2027-30) and supporting multiple expansion above current ~13x NTM P/E.
- Valuation based on 16.5x 2027E P/E; in upside case, ~29%/~39% of 2030 revenue/EBIT from non-auto could support the stock nearly doubling to $140.
Why This Report Matters
BorgWarner's TurboCell and BESS initiatives position it at the intersection of the AI data center power buildout and auto supplier transformation, offering a rare growth and re-rating story with ~19% EPS CAGR and potential for the stock to nearly double in the upside case.
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Companies Mentioned
Who this summary is for
This summary is for users researching the UBS BorgWarner, Inc. report. It helps users review BorgWarner, Inc.: Powering Up; Upgrade to Buy, $95 PT coverage, key takeaways, and related broker or sector research paths across auto supplier upgrade, TurboCell power generation, battery energy storage; BorgWarner.
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