BWA
BorgWarner Inc.
$64.01
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 23.5% above fair value
You pay
$64.01
Bear
$45.36
Fair
$51.83
Bull
$58.32
Bear
$45.36
-29.1%
$2.47 × 14x P/E
Fair
$51.83
-19.0%
$2.47 × 16x P/E
Bull
$58.32
-8.9%
$2.47 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
25.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $80.50 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $51.83 per share.
Warnings
The company's reported profits differ from official accounting profits by 93%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $80.50 (from 38 analysts). Our estimate is 51% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples