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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Borgwarner Inc. (XNYS:BWA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BWA
Name:
BORGWARNER INC. (XNYS:BWA)
Sector:
- 61000.00K
Industry:
Auto Parts
CEO:
Mr. Frederic Lissalde
Total Employees:
49,300
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 11.94% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BORGWARNER INC.(BWA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AUTO PARTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.02
One Month Price Target:
$37.3
Six Month Price Target :
$38.72
Likely Price in One Year's Time:
Ticker:
$40.43
Likely Trading Range Today Under (Normal Volatility)
$36.86
Price Upper limit ($) :
$37.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.03
This week:
$32.58
This month :
$28.14
Other Primary facts
Market Cap:
8.63B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
236.83M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.16%
-11.48%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$46.24
$42.04
$27.80
$32.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$40.67
Buy Put:
Sell Put:
$39.78
$33.35
$34.26
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BWA
Sharpe Ratio:
0.02%
Comparison:
BWA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -97.97% lower than the industry
& is -99.13% lower than the market/S&P 500 average
Average Returns/Yield of
BWA
Daily returns:
0.01%
Weekly returns:
0.05%
Monthly returns:
0.19%
Yearly returns:
9.58%
Comparison of returns:
Average annual returns/yield (last 3 years) is -76.52% below industry average
Classification:
BWA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.7
Statistical test of Returns:
BWA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.62%
Weekly Volatility:
5.85%
Monthly Volatility:
11.70%
Yearly Volatility:
40.53%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.68%
Volatility in last five trading days has been -74.09% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.36%
Weekly VaR:
-11.99%
Monthly VaR:
-23.99%
How Much Can the price of
BWA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-83.10%
This translates to price declining to:
$29.21
This translates to price declining to:
$6.26
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
BWA is a 69.31% riskier investment compared to the market/S&P 500 & is 45.05% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.28% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BWA
Beta in relation to market/S&P 500--1.37
Expected beta in 1 year's time:
0.815
Expected beta in 3 year's time:
1.153
Unlevered (debt free) Beta:
0.917
Beta in relation to Nasdaq (XNAS):
0.767
Beta in relation to all global stocks::
0.633
Beta Comparison & Analysis
Beta of competitors/peers::
1.245
Beta is 9.97% higher than peers
Average Industry Beta:
1.212
Beta is 12.95% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.26%
Sustainable growth rate is -52.12% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.103
Alpha is 447.80% above industry average alpha yield
Alpha is -654% below the market average
Analysis of Cost of Capital of
BWA
Equity cost of capital:
0.125
Equity cost of capital is 9.39% above industry mean WACC
Unlevered (without debt) cost of capital:
8.39%
Before-tax cost of debt:
2.30%
After-tax cost of debt:
1.82%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.82%
WACC is 8.89% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$62.08
Revenue growth rate per share of (3Y):
1.19
Annual revenue growth rate is -9.87% below industry average
EPS:
$2.81
Expected Annual growth rate of EPS (3Y):
-14.74%
Expected future EPS growth rate is -313.90% lower than the Auto Parts industry
Free cash flow (FCF) per share:
$1.78
Balance sheet equity growth per share: -0.24%
Equity growth rate per share is -98.39% lower than the industry
Debt per share
$18.48
EBITDA per share
$7.31
Valuation Analysis Today of
BWA
P/E Ratio:
13.8
P/E Ratio of Competitors/Peers:
19.78
P/E ratio is -30.21% lower than main peers & is -35.35% lower than the industry
Stock price/value with industry average P/E ratio: $60.00
BWA is -38.30% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $15.21
Present value of the expected future dividends only: $5.43
P/S (Price to Sales ratio):
0.6
Price to sales ratio is -73.96% below the industry mean
P/B (Price to book value ratio):
1.19
Price to free cash flow: 20.84
-
Net income growth rate (3Y):
-49.72%
Net income growth rate is -233.93% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.10%
Dividend yeild: 1.84%
Previous Dividend: $0.17
Previous adjusted dividend: $0.17
Previous Dividend: $0.68
-
-
Average dividend payment (long-term): $0.17
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.17
2021-11-30--$0.17
2021-05-28--$0.17
2022-02-28--$0.17
2021-08-31--$0.17
2021-02-26--$0.17
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
62.07%
Net debt to equity ratio:
42.26%
Debt to assets ratio:
26.24%
Net debt to assets ratio:
17.86%
Debt-to-asset ratio is -49.96% below industry average
Ability to repay debt:
Interest coverage ratio:
16.81
Interest coverage ratio is -61.29% less than industry average
Looking forward:
Debt growth rate:
12.88%
Annual debt growth is -52% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.616
Statistical significance of correlation:
BWA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.534
Stock price is 15.19% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.534
Correlation of price movement with Nasdaq (^IXIC):
0.012
Covariance of price movement with the market:
0.019
Kurtosis
3.182
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.063
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BWA
Gross Profit Margin Ratio:
76%
Operating Profit Margin Ratio:
7.55%
Operating profit margin is -20.33% lower than the industry
Net Profit Margin Ratio:
76%
Effective Tax Rate:
20.56%
Effective tax rate is -14.23% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.53%
Return on equity (ROE) is -55.53% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.03%
Return on assets (ROA) is -56.03% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.72
Current ratio is -14.18% below industry average
Cash Conversion Cycle (days):
13.9
Cash conversion cycle is -76.73% below industry average
The remaining useful life of property plant & equipment is: 12.0 years
Stock based compensation to net income ratio:
1.79%
In-depth Efficiency Analysis
Revenue generated per employee:
298.2K
Each employee generates -7% less revenue than industry average revenue per employee
EBITDA generated per employee:
35.1K
Each employee generates -44% less EBITDA than industry average revenue per employee
Profit generated per employee:
13.6K
Each employee generates -60% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.2K
Each employee generates -119% less free cash flow than industry average revenue per employee
Assets/Capital per employee
203.6K
Each employee generates -119% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BWA
MOHAWK INDUSTRIES, INC. (XNYS:MHK)
FLOOR & DECOR HOLDINGS, INC. (XNYS:FND)
LEAR CORPORATION (XNYS:LEA)
WESTROCK COMPANY (XNYS:WRK)
SERVICE CORPORATION INTERNATIONAL (XNYS:SCI)
FARFETCH LIMITED (XNYS:FTCH)
VAIL RESORTS, INC. (XNYS:MTN)
TAPESTRY, INC. (XNYS:TPR)
GAMESTOP CORP. (XNYS:GME)
Current Analyst Ratings
Strong buy�8%
Buy�25%
Hold�42%
Sell�13%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
14.70B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
11.92B
2.79B
-
707.00M
1.47B
-
-
1.47B
13.00M
103.00M
757.00M
1.73B
1.11B
672.00M
968.00M
199.00M
672.00M
Statement of Cash Flow
Date:
Period:
180.00M
Differed Income Tax :
- 8000.00K
Stock Based Compensation :
12.00M
Change in Working Capital :
- 302000.00K
Accounts Receivables:
-
Other Working Capital:
- 8000.00K
Other Non-Cash Items:
10.00M
Net Cash Provided by Operating Activities:
116.00M
Investments in PP&E:
-
Net Acquisitions:
- 132000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.50B
-
1.50B
3.19B
1.64B
310.00M
6.64B
4.52B
3.39B
1.15B
365.00M
270.00M
347.00M
10.04B
-
16.68B
2.47B
104.00M
210.00M
242.00M
1.05B
3.86B
4.38B
800.00M
5.48B
-
9.34B
3.00M
6.83B
- 564000.0K
781.00M
March 31, 2022 at 6:00:00 AM
13.39B
7.05B
16.39B
-
4.48B
3.0B
42.00M
- 164000.00K
- 254000.00K
- 2000.00K
-
- 40000.00K
- 41000.00K
- 112000.00K
- 195000.00K
- 7000.00K
- 340000.00K
1.50B
1.84B
116.00M
- 177000.00K
- 61000.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
BWA
2023
2024
2025
2026
2027
$45.38
$49.56
$54.12
$59.10
$64.53