UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on BorgWarner
In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on BorgWarner (NYSE: BWA), but slightly lowered its price target from $82.00 to $81.00.
J.P. Morgan noted, “We rate BWA shares Overweight. BWA manufactures a variety of engine and drivetrain components that increase fuel efficiency and reduce emissions, such as turbochargers and automatic transmission components. Demand for BWA products is strong, driven by both consumer “pull” and government “push” elements, and we believe will only increase over time as the rising amount of vehicles in emerging markets upwardly pressures fuel prices. BWA already enjoys the second highest margins in the sector, in part driven by the fact that many of the products it manufactures are of a highly engineered nature, leading to high technical barriers to entry and market concentration. Still, we expect the combination of rapid top-line growth and financial discipline to allow for top tier operating margin expansion over our forecast window (+120 bp 2011-2014E). High Europe exposure is concerning in a downside scenario, but offset in part by ideal customer mix within Europe and diversification into higher growth Asian markets.”
BorgWarner closed on Friday at $66.47.
Latest Ratings for BWA
|Nov 2014||JP Morgan||Maintains||Overweight|
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