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Jefferies Favors BorgWarner And Delphi, Neutral On Tenneco

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Mobility innovation is expected to drive “the next leg” of the automotive industry’s growth, and auto suppliers that have “value-add products in categories that drive improved fuel efficiency or active safety evolution are appear most likely to outperform,” Jefferies’ David Kelley said in a report.


Kelly initiated coverage of BorgWarner Inc. (NYSE: BWA) with a Buy rating and a price target of $43. He mentioned that the company was a propulsion leader and its growth would be driven by the growing penetration of internal combustion.

Turbochargers accounted for 31 percent of BorgWarner’s 2015 revenue and is the company’s largest product segment. Increasing global regulatory pressures would likely exert pressure on ICE engines, while turbocharger penetration is expected to grow.

The analyst added that the Remy acquisition positions BorgWarner for “improved alternative powertrain penetration given a growing product portfolio of electric motors and thermal management and synergies across drivetrain and stop-start technology.”

Delphi Automotive

Kelly initiated coverage of Delphi Automotive PLC (NYSE: DLPH) with a Buy rating and a price target of $80. He considers the company as being the “best positioned” to benefit from the growing penetration of Electronics & Safety and Powertrain Systems segment technologies.

The Electronic Architecture segment would benefit from the expected trends of rising electrification across multiple vehicle function.


The analyst initiated coverage of Tenneco Inc (NYSE: TEN) with a Hold rating and a price target of $62. He mentioned that the company’s Clean Air division was poised to benefit from the “continued rollout of global emissions regulations of criteria pollutants.”

Tenneco’s aftermarket business, Ride Performance, appears underappreciated and could continue to outperform backed by favorable industry fundamentals.

Latest Ratings for BWA

Dec 2017OppenheimerInitiates Coverage OnOutperform
Oct 2017CitigroupMaintainsNeutral
Oct 2017BMO CapitalMaintainsOutperform

View More Analyst Ratings for BWA
View the Latest Analyst Ratings

Posted-In: David L. Kelley JefferiesAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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