Goldman Sachs upgraded BorgWarner (NYSE:BWA) to a Buy rating from Neutral, raising its price target to $34 from $31, pointing to the company’s relative strength in navigating the evolving global auto landscape.
Despite trimming overall estimates for the automotive parts sector, Goldman sees BorgWarner in a more favorable light due to several key factors. The company’s exposure to U.S. import tariffs is relatively limited, which lowers potential downside risk from trade tensions. Additionally, its strategic manufacturing footprint—producing components in the same regions where they’re sold—provides a buffer against rising global tariff threats.
Another strength lies in BorgWarner’s significant presence in China, which accounts for roughly 20% of its total revenue. Much of this is linked to fast-growing domestic automakers, especially those focused on electric vehicles (EVs), where BorgWarner’s expanding lineup of eProducts positions it to benefit from surging demand.
Goldman also noted the firm’s strong position across a range of powertrains, including hybrids and internal combustion engines. While the EV transition accelerates, the extended relevance of traditional drivetrains gives BorgWarner a longer revenue runway in legacy segments, while still capturing EV market growth.