There are two pretty distinct camps where BorgWarner (NYSE:BWA) is concerned. Bears argue that the company will be unable to replicate its dominance in combustion engine powertrains in the coming EV world, and that the company will see OEM in-sourcing limit its opportunities to offset declines in its conventional business.
Bulls argue that, yes, while there will be some in-sourcing, very few OEMs will be able to insource all of their needs, and many of those that try will ultimately run into problems turn to quality suppliers like BorgWarner. And in the meantime, BorgWarner can continue to generate attractive cash flows from legacy combustion powertrains and hybrids. I’ve long been in that second group, and even after a one-third move up in the share price since my last article (a middle-of-the-pack performance), I’m still bullish on these shares. BorgWarner will need to put forth a convincing case at its March 23 Investor Day to swap skeptics, but I believe the valuation here is still attractive relative to the long-term opportunities.
Read the full article here:
BorgWarner Still A Battleground For The Future Of Auto Suppliers
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