BorgWarner
It makes the turbochargers, timing chains and gearbox parts inside petrol cars, and from 2027 plans to sell gas turbines that power data centres on site.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth2/4 →
Organic sales rose 0.5% in 2025 and are guided down 1.5% to 3.5% in 2026; management itself says it is not outgrowing production.
Business quality3/4 ↓
About 30% of a two-firm turbo market and engine segments earning 15% to 18%, but electric cars remove the product and Volkswagen builds drives.
Financial position3/4 ↑
Net debt about 0.7 times cash profit and $1B of yearly free cash flow; not net cash, and $1.1B falls due in 2027.
Execution record3/4 ↑
Five straight quarters ahead of estimates and margins up on flat sales, but $1.27B of electric write-downs and a charging exit in two years.
Per share capture3/4 →
Diluted shares down about 8% in eighteen months on cash buybacks, but cash acquisitions behind $1.27B of write-downs did not reach shareholders.
Potential2/4 ↑
The turbine's only commitment is an unfiled framework with one private channel, no volume or term; more capacity and hyperscaler orders are still expected.
Risk profile3/4 →
Volkswagen and Ford are a quarter of sales and China about a fifth; the turbine rests on one partner, survivable because it is small.
Valuation3/4 →
About 10.3 times guided operating profit and an 8% cash yield price the core fairly; the $1.4B premium is one turbine year at power-equipment multiples.
Evidence quality3/4 →
The core rests on filed segment figures; every turbine figure is management's, from calls and a furnished 8-K, never a 10-K or 10-Q.
The bet · 2-3 years
Safe, little upside1.0×
If it works 1.0× · if it fails you keep about 89%.
The Verdict
We rate BorgWarner neutral. It makes turbochargers, timing chains and other parts for petrol cars; that side throws off cash, much of it handed back to shareholders, but sales are flat and its electric-car businesses lose money, so the business is mixed. The price is fair: about right for the car parts, plus a slice paid up front for a new gas turbine for data centres that has no sales yet, lost if it never sells. As a bet it is defensive: about what it costs today if the turbine works, about a tenth less if it never sells. Turbine orders with stated volumes would change the view.
The long caseData centres short of grid power are building their own, and buyers will take a new turbine maker if it can deliver sooner than the queue.
The evidence under this - 9 claims
C04facthigh confidence
In 2025 the two engine-related segments earned $1.920B of segment adjusted operating income, Turbos & Thermal $879M and Drivetrain & Morse $1.041B, more than the $1.798B all four segments earned together, because PowerDrive Systems lost $83M and Battery & Charging Systems lost $39M.
C43inferencemedium confidence
BorgWarner's profit comes from parts that exist only where there is an engine, while the electric parts meant to replace them have lost money and cost $1.27B of write-downs in two years.
derivedC04 gives the profit split, C05 the sales split, C06 the write-downs.
against this
- Hybrids carry both turbos and electric parts, and hybrid output is forecast to grow (C19).
- PowerDrive earned $28M of adjusted profit in Q4 2025, and the battery segment's first-half loss narrowed to $4M (S02, S05).
- The inverter extension awards in Q2 2026 show electric parts still winning business (S05).
C08management claimmedium confidence
Management guides 2026 net sales of $14.0B to $14.3B, organic sales down 3.5% to 1.5%, a GAAP operating margin of 9.6% to 9.8%, an adjusted operating margin of 10.7% to 10.9%, adjusted earnings per share of $5.05 to $5.30 and free cash flow of $900M to $1.1B.
against this
- The earnings-per-share raise in August came entirely from share repurchases; sales, margin and cash guidance were only held (S05).
- The GAAP margin guide was lowered from 9.8%-10.0% in February to 9.6%-9.8% in August (S02, S05).
- The CFO said the midpoint implies a second-half adjusted margin near 10.6%, below the first half, on sales about $7.0B (S06).
- The guided battery decline widened from about $210M to about $250M between February and August (S02, S05).
C31facthigh confidence
In 2025 BorgWarner generated $1.648B of operating cash flow and $1.208B of free cash flow after $469M of capital spending, and returned about $630M to shareholders.
C26estimatemedium confidence
At $61.32 the whole company, shares plus net debt and minority stakes, costs about $14.1B, or about 10.3 times its guided 2026 operating profit of about $1.37B. On 10 February, the day before the turbine award was announced, the same measure was about 9.2 times. The gap is about $1.4B, or about $7 a share, which is what today's price holds for the turbine and other industrial products.
derivedMarket value 203,666,354 shares (S04 cover) at $61.32 is $12.49B; plus $3.868B debt, less $2.448B cash, plus $177M minority interest at 30 June 2026 (S05) gives $14.09B. Guided GAAP operating margin midpoint 9.7% on $14.15B midpoint sales (C08) is $1.373B. On 10 February: $53.98 on 207,048,768 shares (S01 cover) plus 2025 year-end net debt and minority interest of $1.758B (S02) gives $12.93B, over the then-guided 9.9% on $14.15B, $1.401B: 9.23 times. At 9.23 times, $1.373B supports $12.67B, which is $11.08B of equity, $1.41B less than today.
against this
- 11 February also carried the full-year results, 2026 guidance and record car-part awards, so not all of that day's move was the turbine (S02).
- Against the end-2025 multiple of about 7.9 times, before a 20% rally in early 2026, the premium would be nearer $3.2B; the baseline is a choice (S15).
- The August bond tender used cash to retire debt, which leaves this enterprise value roughly unchanged but is not yet in a filed balance sheet (S08).
C12management claimmedium confidence
Management expects turbine generator production to begin in Hendersonville, North Carolina, in 2027 with an initial 2 GW of installed capacity, and first-year sales of more than $300M.
source8-K Item 7.01, turbine generator reiterationprimaryQ4 2025 earnings call transcript (FMP)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- Management declined to link the $300M to the 2 GW or to size revenue at capacity (S03).
- The figure was reiterated in an 8-K furnished 'in response to questions', not in a filed report (S07).
- The product has not been through UL certification yet; component certification was due to start in September 2026 (S06).
C13facthigh confidence
Neither the FY2025 10-K nor the Q2 2026 10-Q mentions the turbine generator, TurboCell or data centres. Every figure about it comes from results releases, calls and one furnished 8-K.
C48estimatelow confidence
Valued at 20 to 32 times operating profit, like the listed power-equipment makers, the $1.4B the price holds for the industrial products needs $44M to $70M of turbine operating profit a year, about $294M to $470M of sales at a 15% margin: 1.0 to 1.6 times the stated first year. At a 10% margin it needs 1.5 to 2.4 times.
derived$1.41B (C26) divided by 20 and by 32 (C47) gives $70M and $44M; divided by 15% (C14) gives $470M and $294M, against more than $300M in the first year (C12); at 10%, $705M and $441M.
against this
- A product not yet certified or launched carries risk its established rivals do not, and a peer multiple applied to it gives that risk away (C12, C13).
- The premium also covers battery storage and inverters, which have no disclosed figures, so the turbine alone may need less than this or the others may be worth nothing (C38).
- The first sales are in 2027, so a year of waiting sits between today's price and the first profit (C12).
C16management claimlow confidence
Management says customer interest in the turbine includes 'multiple hyperscalers', that demand is not a constraint, and that it will decide on more capacity in the second half of 2026.
against this
- No hyperscaler, order, volume or term has been disclosed (S06, S07).
- Management has not said what revenue 2 GW of capacity supports (S03).
The company
BorgWarner makes the parts inside a car's engine and gearbox: turbochargers, timing chains, clutch plates and, for electric cars, inverters and motors.
A turbocharger uses exhaust gas to push more air into the engine, so a smaller engine does the work of a bigger one. Car turbos are its largest product, about 21% of sales. From 2027 it adds a product outside cars: a turbine generator that makes electricity at data centres.
The evidence under this - 3 claims
C01facthigh confidence
BorgWarner makes powertrain parts for carmakers: turbochargers, thermal and emissions parts, timing chains, cam phasers, transmission clutches, transfer cases, inverters, electric motors and battery packs. In 2025, 82% of sales went to light vehicles, 10% to commercial vehicles, 5% to off-highway machines and 3% to aftermarket distributors.
C03facthigh confidence
Turbochargers for light vehicles were about 21% of BorgWarner's net sales in 2025, 2024 and 2023 alike, and no other single product line exceeded 10%.
C11facthigh confidence
BorgWarner signed a master supply agreement with TurboCell, a subsidiary of the private data-centre developer Endeavour, to supply a modular turbine generator system for data centres and other small local grids.
How it makes money
A carmaker picks the supplier for a part years before a model goes into production, then buys it for the life of that model. Volkswagen took 13% of 2025 sales and Ford 12%.
The engine side pays for everything. Its two engine businesses earned $1.92B of adjusted operating profit in 2025, more than all four businesses together, because the electric ones lost $122M.
The evidence under this - 3 claims
C01facthigh confidence
BorgWarner makes powertrain parts for carmakers: turbochargers, thermal and emissions parts, timing chains, cam phasers, transmission clutches, transfer cases, inverters, electric motors and battery packs. In 2025, 82% of sales went to light vehicles, 10% to commercial vehicles, 5% to off-highway machines and 3% to aftermarket distributors.
C21facthigh confidence
Volkswagen took 13% of BorgWarner's 2025 sales and Ford 12%, and the top ten customers 71%.
C04facthigh confidence
In 2025 the two engine-related segments earned $1.920B of segment adjusted operating income, Turbos & Thermal $879M and Drivetrain & Morse $1.041B, more than the $1.798B all four segments earned together, because PowerDrive Systems lost $83M and Battery & Charging Systems lost $39M.
Where the money comes from, stream by stream
| Stream | Share of sales (H1 2026) | How it earns it |
|---|---|---|
| Turbos & Thermal Technologies | 40.0% | Turbochargers, thermal and emissions parts sold to carmakers and truck makers, per part, under multi-year programme awards. |
| Drivetrain & Morse Systems | 40.1% | Timing chains, cam phasers, transmission clutches and transfer cases for combustion and hybrid vehicles, sold per part on programme awards. |
| PowerDrive Systems | 17.4% | Electric motors, inverters and electric drives for electric and hybrid vehicles; still loss-making on its segment measure. |
| Battery Energy Systems | 2.8% | Battery packs for commercial vehicles, shrinking after the charging exit; future energy-storage products would sit here. |
Who runs it
Joe Fadool, a BorgWarner lifer who ran its turbocharger business, became chief executive in February 2025; Craig Aaron, the former treasurer, has run finance since March 2024. Insiders own under 1% of the company. Their yearly bonus rides on profit margin and cash, and most of their shares pay on the stock against rivals, sales growth beyond the car market and earnings per share. Most spare cash has gone into buying back shares.
The evidence under this - 4 claims
C59facthigh confidence
Joseph Fadool, at BorgWarner since 2010, became chief executive on February 6, 2025, after running the turbo, emissions and thermal businesses from 2019 and serving as chief operating officer from July 2024. Craig Aaron, at the company since 2007 and formerly its treasurer and controller, has been finance chief since March 2024.
C57facthigh confidence
As of March 3, 2026 the 17 directors and executive officers owned 1,556,923 shares, under 1% of the 206,061,488 outstanding, none individually reaching 1%; the chief executive held 434,964, the most of any current insider. Vanguard (12.1%), BlackRock (9.0%), BlackRock Portfolio Management (7.3%) and Dimensional (5.5%) reported holdings above 5%.
C58facthigh confidence
The 2025 annual cash bonus paid half on adjusted operating margin and half on free cash flow; a 10.80% margin against a 10.40% target and $1,208M of free cash flow paid the chief executive, finance chief and administrative chief 175% of target. Two-thirds of long-term awards are 2025-2027 performance units paying on relative shareholder return (50%), revenue growth above the market (25%) and cumulative adjusted earnings per share (25%); one-third is restricted stock.
against this
- The bonus margin and adjusted earnings per share are the company's adjusted measures, which leave out the impairment charges (C06), so the write-downs cost the plan little.
- Relative revenue growth, the gap management itself calls unsatisfactory (C10), carries a quarter of the performance units and nothing in the bonus.
C60facthigh confidence
From 2023 to 2025 BorgWarner spent $1,087M on buybacks ($177M, $402M, $508M) against $186M of stock pay, paid $347M of dividends, repaid $1,385M of debt while adding $1,026M, spent $109M on an acquisition in 2023 and received a $401M net distribution on spinning off PHINIA; diluted shares fell from 234.4 million to 216.4 million.
against this
The electric businesses built partly by earlier cash acquisitions were written down by $1.27B in 2024 and 2025 (C06).
Why it wins, and who could beat it
Why customers come back
Turbos need heat-proof alloys, precise balancing and plants near every big carmaker. Two companies, BorgWarner and Garrett, sell most of a $10B market, and BorgWarner's roughly 30% share spreads the engineering and tooling cost over more units than a newcomer could.
It shows in the margins: in 2025 the two engine businesses kept 15.2 and 18.4 cents of adjusted operating profit on each dollar of sales.
The evidence under this - 4 claims
C17factmedium confidence
Garrett Motion, the turbocharger rival BorgWarner names, calls itself a leader in a $10 billion OEM turbocharger industry, and quotes S&P Global Mobility that turbos were fitted to about 51% of gasoline engines in 2025, forecast 53% in 2026.
C18estimatemedium confidence
BorgWarner's light-vehicle turbocharger sales were about $3.0B in 2025, roughly 30% of the $10 billion industry Garrett describes.
derived21% of $14.316B of 2025 net sales (C03) is $3.01B; divided by Garrett's $10 billion (C17). It mixes BorgWarner's light-vehicle figure with Garrett's all-OEM figure, so it is an order of size, not a share anyone has published.
against this
- Garrett's $10 billion includes commercial-vehicle turbos, which BorgWarner's 21% excludes, so the share is understated if anything; nobody publishes the split.
- Chinese makers and in-house carmaker units sell turbos too, and neither company names their share.
C03facthigh confidence
Turbochargers for light vehicles were about 21% of BorgWarner's net sales in 2025, 2024 and 2023 alike, and no other single product line exceeded 10%.
C04facthigh confidence
In 2025 the two engine-related segments earned $1.920B of segment adjusted operating income, Turbos & Thermal $879M and Drivetrain & Morse $1.041B, more than the $1.798B all four segments earned together, because PowerDrive Systems lost $83M and Battery & Charging Systems lost $39M.
The threat
The biggest threat is the biggest customer. Volkswagen has built 1 million of its own electric drives and is designing its next inverter in-house, and BorgWarner's annual report says several carmakers plan to make its parts themselves.
In data-centre power it is the newcomer: Bloom Energy is doubling its fuel-cell factory to 2 GW, and Caterpillar already sells turbines there.
The evidence under this - 6 claims
C20facthigh confidence
Volkswagen, BorgWarner's largest customer, has built 1 million of its own APP550 electric drives at its Kassel plant and says its next pulse inverter is developed in-house for faster development, lower cost and 'more independent manufacturing'.
C21facthigh confidence
Volkswagen took 13% of BorgWarner's 2025 sales and Ford 12%, and the top ten customers 71%.
C22facthigh confidence
BorgWarner's own 10-K says a number of major carmaker customers have said they intend to insource components it produces, and many already make competing products for themselves.
C23facthigh confidence
Bloom Energy, which already ships fuel-cell power to data centres, plans to double its factory capacity from 1 GW to 2 GW by the end of 2026, and a utility has agreed to procure up to 1 GW of its fuel cells.
C24facthigh confidence
Caterpillar expects its power generation sales of engines and turbines to grow in 2026 on data-centre demand, and says prime-power orders are trending higher as data-centre customers look for other power sources.
C44inferencemedium confidence
In data-centre power BorgWarner is a new entrant reaching buyers through one private partner, against rivals that already ship at the scale it is building.
derivedC15 gives the single channel, C23 and C24 the shipping rivals, C12 the 2 GW plan and the 2027 start.
against this
- Management says the turbine is lower-emission, faster to respond and fuel-flexible, and that time to power matters more than cost (S03, S06).
- Bloom and Caterpillar both describe demand outrunning supply, which leaves room for a new entrant (S12, S13).
The rivals: BE, CAT, MGA, GTX, and 1 more that is private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Volkswagen ID. electric cars on Volkswagen's own APP550 electric drivePriced against it: Listed abroad | Turbos & Thermal Technologies | On sale | Listed abroad | |
| Volkswagen APP550 single-speed electric drive, built in Kassel | Drivetrain & Morse Systems | On sale | ||
| Volkswagen Group Components' in-house pulse inverter | PowerDrive Systems | Announced | ||
| BE | Bloom Energy solid-oxide fuel cellsPriced against it: Different product | Turbine generator system (industrial products, not a reportable segment) | On sale | Different product |
| CAT | Caterpillar gas engines and Solar Turbines gas turbinesPriced against it: One segment only | Turbine generator system (industrial products, not a reportable segment) | On sale | One segment only |
| MGA | Magna InternationalPriced against it: Yes | - | On sale | Yes |
| GTX | Garrett MotionPriced against it: Yes | - | On sale | Yes |
How big it could get
How big this could get
Carmakers buy about $10B of turbochargers a year, on Garrett's count, and hybrids, which still need one, are forecast to grow from 16 million a year in 2025 to 26 million in 2029.
The new market is vaguer. US data centres used 176 terawatt-hours of electricity in 2023, and a government laboratory expects 325 to 580 by 2028. Nobody measures how much of that is made on site, the part a turbine serves.
The evidence under this - 3 claims
C17factmedium confidence
Garrett Motion, the turbocharger rival BorgWarner names, calls itself a leader in a $10 billion OEM turbocharger industry, and quotes S&P Global Mobility that turbos were fitted to about 51% of gasoline engines in 2025, forecast 53% in 2026.
C19factmedium confidence
Garrett's 10-K quotes S&P Global Mobility forecasting that hybrids, excluding mild hybrids but including range extenders, rise from about 16 million vehicles in 2025 to 26 million in 2029, and that battery-electric cars reach 28% of global light-vehicle production by 2030.
C25facthigh confidence
Lawrence Berkeley National Laboratory measured US data-centre electricity use at 176 TWh in 2023, up from 58 TWh in 2014, and estimates 325 to 580 TWh by 2028.
Who has signed
For the turbine, one partner has signed: TurboCell, owned by the private data-centre builder Endeavour, under a supply agreement with no stated volume or length. Management expects more than $300M of first-year sales.
The evidence under this - 2 claims
C11facthigh confidence
BorgWarner signed a master supply agreement with TurboCell, a subsidiary of the private data-centre developer Endeavour, to supply a modular turbine generator system for data centres and other small local grids.
C12management claimmedium confidence
Management expects turbine generator production to begin in Hendersonville, North Carolina, in 2027 with an initial 2 GW of installed capacity, and first-year sales of more than $300M.
source8-K Item 7.01, turbine generator reiterationprimaryQ4 2025 earnings call transcript (FMP)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- Management declined to link the $300M to the 2 GW or to size revenue at capacity (S03).
- The figure was reiterated in an 8-K furnished 'in response to questions', not in a filed report (S07).
- The product has not been through UL certification yet; component certification was due to start in September 2026 (S06).
The results
The numbers
Is it growing?Slow
Sales grew 2.2% over the twelve months to Jun 2026, about the same pace as the 1.6% in the year to Dec 2025.
Is it profitable?Thin
Operating margin is 5.0%, down from 8.2% in the year to Dec 2023.
Does growth pay off?Flat
Running costs take 14¢ of each sales dollar, up from 11¢ in the year to Dec 2021.
Does it earn good returns?Low
Each dollar put into the business earns 5.0% a year after tax, about where it was (7.5%) in the year to Dec 2021.
How steady is it?Uneven
Yearly sales growth has ranged from −0.8% to +16% over the last 5 years, with sales falling in 1 of them.
Are shares being diluted?Shrinking
The share count fell 14% in 4.5 years.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-05. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $11.8B | $12.6B | $14.2B | $14.1B | $14.3B | $14.3B |
| Sales growth | +16% | +7.0% | +12% | −0.8% | +1.6% | +2.2% |
| Profit | ||||||
| Gross margin | 18% | 19% | 18% | 19% | 19% | 19% |
| Operating margin | 7.7% | 8.0% | 8.2% | 3.9% | 3.7% | 5.0% |
| Net margin | 4.5% | 7.5% | 4.4% | 2.4% | 1.9% | 2.9% |
| What growth costs, per sales dollar | ||||||
| Research and development | 5.0% | 5.5% | 5.1% | 5.2% | 5.0% | 4.9% |
| Selling, general and admin | 9.2% | 10% | 9.3% | 9.6% | 9.1% | 9.3% |
| Pay in shares | 0.4% | 0.5% | 0.4% | 0.4% | 0.5% | - |
| Capital spending | 4.4% | 4.9% | 5.9% | 4.8% | 3.3% | 3.6% |
| Cash | ||||||
| Cash from operations | $1.31B | $1.57B | $1.40B | $1.38B | $1.65B | - |
| Free cash flow | $792M | $947M | $565M | $711M | $1.18B | - |
| Balance sheet | ||||||
| Cash and short-term investments | $1.84B | - | - | - | - | - |
| Debt | $4.26B | $4.14B | $3.71B | $4.10B | $3.90B | $3.87B |
| Net cash | −$2.42B | - | - | - | - | - |
| Returns and shares | ||||||
| Return on capital | 7.5% | 7.0% | 7.9% | 4.5% | 3.6% | 5.0% |
| Shares (diluted) | 240M | 237M | 234M | 225M | 216M | 206M |
What growth costs
Growing has made BorgWarner neither more nor less profitable. Research, overheads and stock pay take about the same share of each sales dollar as five years ago, and the gross margin barely moved. The one cost that fell is spending on factories, as the electric-car push was cut back; the turbine plant and extra industrial research push costs up again this year.
The evidence under this - 3 claims
C56facthigh confidence
Per sales dollar, net R&D was 5.0 cents in 2021 and 2025 (5.5 in 2022), total selling, general and administrative costs including it 9.2 and 9.1 cents, stock pay about half a cent throughout, and capital spending fell from 5.9 cents in 2023 to 3.3 in 2025, while sales rose from $11.8B to $14.3B and gross margin from 18.4% to 18.7%. Net R&D is gross R&D, $823M in 2025, less $113M of customer reimbursements; the XBRL R&D figure is the net one.
sourceBorgWarner Form 10-K for the fiscal year ended December 31,…primaryBorgWarner Form 10-K for the fiscal year ended December 31,…primary
against this
- Selling, general and administrative costs other than R&D rose to 4.3% of sales in Q2 2026 from 3.7% a year earlier (S04).
- Management plans $10M to $15M of extra industrial R&D in the second half of 2026, and guides capital spending up for the turbine plant (C38, C31).
C38management claimmedium confidence
Management plans an extra $10M to $15M of industrial R&D in the second half of 2026, expects battery storage to be production-ready in 2027, and says four customers hold samples of its microgrid inverter, with quoting from late 2026.
against this
None of the three has a disclosed order, and the chief executive said these products take 18 to 24 months to develop (S06).
C31facthigh confidence
In 2025 BorgWarner generated $1.648B of operating cash flow and $1.208B of free cash flow after $469M of capital spending, and returned about $630M to shareholders.
The last report (5 Aug)
Quarter ended June 2026, filed figures.
0%
Sales growth
against the same quarter a year earlier
3.3%
Growth from the quarter before
against -1.1% the quarter before that
10¢
Operating profit
per dollar of sales
The second quarter of 2026 was a profitable one: sales of $3.648B, 11.3 cents of adjusted operating profit on each dollar, $492M of spare cash, and earnings above forecast for the fifth quarter running.
What it did not show is growth. Without currency moves, sales fell 1.2%, and management expects the year's to fall 1.5% to 3.5%. The chief executive said he was not pleased with how little the company outgrows car production.
What it did to the thesisIt supported the steady half of the case: the car-parts business still throws off cash and beats forecasts. It did nothing for growth, which management itself admitted is weak, so the view stays Neutral while the turbine bet remains unproven beyond its first year.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $1.42 against $1.28 expected; $1.34 as filed, the gap being what the company adds back.
The evidence under this - 5 claims
C09facthigh confidence
In Q2 2026 net sales were $3.648B, GAAP operating income $370M or 10.1% of sales, adjusted operating income $413M or 11.3%, and free cash flow $492M.
C45facthigh confidence
Adjusted earnings per share beat the analysts' average estimate in each of the last five reported quarters, by 6% to 16%, on the company's own adjusted figures of $1.21, $1.24, $1.35, $1.24 and $1.42.
C07facthigh confidence
Organic sales, which exclude currency and acquisitions, rose 0.5% in 2025, and fell 1.2% in Q2 2026 while reported sales rose 0.3% on stronger currencies.
C08management claimmedium confidence
Management guides 2026 net sales of $14.0B to $14.3B, organic sales down 3.5% to 1.5%, a GAAP operating margin of 9.6% to 9.8%, an adjusted operating margin of 10.7% to 10.9%, adjusted earnings per share of $5.05 to $5.30 and free cash flow of $900M to $1.1B.
against this
- The earnings-per-share raise in August came entirely from share repurchases; sales, margin and cash guidance were only held (S05).
- The GAAP margin guide was lowered from 9.8%-10.0% in February to 9.6%-9.8% in August (S02, S05).
- The CFO said the midpoint implies a second-half adjusted margin near 10.6%, below the first half, on sales about $7.0B (S06).
- The guided battery decline widened from about $210M to about $250M between February and August (S02, S05).
C10management claimmedium confidence
The chief executive said on the Q2 2026 call that he and the finance chief are not pleased with how little the company is outgrowing vehicle production, and expects two years of awards to improve that from 2027.
against this
- The same management guides 2026 organic sales roughly in line with a market it expects to fall up to 3% (S05).
- Organic growth was 0.5% in 2025 on awards announced in earlier years (S02).
What management did with the money
It hands back much of what it makes. In 2025 it turned $1.21B into spare cash and returned about $630M, and the share count fell from 224.8 million in 2024 to 206.3 million by June 2026.
Insiders in 2026Q2: 14 purchases and 10 sales, from their Form 4 filings.
The evidence under this - 2 claims
C31facthigh confidence
In 2025 BorgWarner generated $1.648B of operating cash flow and $1.208B of free cash flow after $469M of capital spending, and returned about $630M to shareholders.
C28facthigh confidence
Diluted shares fell from 224.8 million in 2024 to 216.4 million in 2025 and 206.3 million in Q2 2026. BorgWarner bought back about $650M of stock in the four quarters to June 2026 and raised its authorisation by $1B, to $1.35B through 2029.
The price, and where we disagree
In short. Fair. The car-parts business is fairly priced. About $1.4B of the price pays for a new gas turbine that powers data centres, which needs orders beyond its first year to be worth more.
Share price
$60.11
close,
Company value for each $1 of operating profit
19.5
rivals' middle 11.8
The market has priced the turbine in and out twice. The shares jumped 22.5% on the day it was announced in February, gave it all back within a month, and have swung since.
The next results, on 29 October, could settle part of it. Management says it will decide on more turbine capacity in the second half of 2026, and that several of the largest cloud companies are interested.
The evidence under this - 2 claims
C33facthigh confidence
The shares closed at $53.98 on 10 February 2026 and $66.10 on 11 February, a 22.5% rise on the day the turbine award was announced, fell back to $53.25 by 9 March, reached a 252-day high of $78.82 on 3 June and closed at $61.32 on 25 September.
C16management claimlow confidence
Management says customer interest in the turbine includes 'multiple hyperscalers', that demand is not a constraint, and that it will decide on more capacity in the second half of 2026.
against this
- No hyperscaler, order, volume or term has been disclosed (S06, S07).
- Management has not said what revenue 2 GW of capacity supports (S03).
The betSafe, little upside
If it works
1.0×
from today's value, at the stated multiple
If it fails
keep 89%
of today's market value: the rest of the company, less its debt
How we read the multiple
A write-down cut last year's profit. On this year's expected operating profit the whole company, debt included, costs about 10 times, against 9 before the turbine was announced. That gap, about $1.4B, is the turbine:
- Its first year should earn about $45M of profit.
- Priced like the car parts, $1.4B needs about $0.9B of turbine sales a year.
- Priced like generator makers such as Cummins, it needs $294M to $470M.
- That is about one year of the $300M promised; gains need more orders.
Against its own history. Dearer than its own normal, but that normal includes years of write-downs, and the rise since last year came from the price paid, not from sales.
The evidence under this - 6 claims
C26estimatemedium confidence
At $61.32 the whole company, shares plus net debt and minority stakes, costs about $14.1B, or about 10.3 times its guided 2026 operating profit of about $1.37B. On 10 February, the day before the turbine award was announced, the same measure was about 9.2 times. The gap is about $1.4B, or about $7 a share, which is what today's price holds for the turbine and other industrial products.
derivedMarket value 203,666,354 shares (S04 cover) at $61.32 is $12.49B; plus $3.868B debt, less $2.448B cash, plus $177M minority interest at 30 June 2026 (S05) gives $14.09B. Guided GAAP operating margin midpoint 9.7% on $14.15B midpoint sales (C08) is $1.373B. On 10 February: $53.98 on 207,048,768 shares (S01 cover) plus 2025 year-end net debt and minority interest of $1.758B (S02) gives $12.93B, over the then-guided 9.9% on $14.15B, $1.401B: 9.23 times. At 9.23 times, $1.373B supports $12.67B, which is $11.08B of equity, $1.41B less than today.
against this
- 11 February also carried the full-year results, 2026 guidance and record car-part awards, so not all of that day's move was the turbine (S02).
- Against the end-2025 multiple of about 7.9 times, before a 20% rally in early 2026, the premium would be nearer $3.2B; the baseline is a choice (S15).
- The August bond tender used cash to retire debt, which leaves this enterprise value roughly unchanged but is not yet in a filed balance sheet (S08).
C27estimatelow confidence
On management's figures the turbine's first year earns about $45M of operating profit, about 3% of 2026 guided adjusted operating profit of about $1.53B. To be worth the $1.4B the price holds at the same 10.3 times, it would need about $136M a year, roughly $0.9B of sales, three times the stated first year.
derived$300M first-year sales (C12) at about 15% (C14) is $45M; $1.53B is 10.8% of $14.15B (C08). $1.41B (C26) divided by 10.3 is $137M; at 15% that needs $0.91B of sales.
against this
- Management says 'more than' $300M, and the first year is a partial ramp, so a full year could be larger (S03).
- A turbine business could deserve a higher multiple than the car-parts core, which would lower the sales needed (S12, S13).
- Battery storage and microgrid inverters are also in the premium and have no disclosed figures at all (S06).
C41facthigh confidence
The price paid for each dollar of trailing sales is 0.88, against a six-year median of 0.65; enterprise value to sales is 0.99 against 0.81.
C32facthigh confidence
Over the 252 trading days to 25 September 2026 the shares rose 41.5%: sales per share rose 7.5%, while the price paid for each dollar of sales rose 31.6%.
C47estimatemedium confidence
On 26 September 2026 the market valued Cummins at about 20 times its trailing operating profit, and Caterpillar and Generac at about 32 times; GE Vernova and Bloom Energy were above 130 times on thin trailing profit and say nothing usable.
derivedEnterprise value over trailing revenue times trailing operating margin, both from FMP's trailing ratios (S20), struck the same way for each. Vendor figures, not reconciled against each filing; read as a range, not a point.
against this
- All five companies' prices have been lifted by the same data-centre demand, so their multiples may be a theme's rather than a durable level (S12, S18, S19).
- Data-centre power is a minority of each company's sales, so their whole-company multiple prices mostly trucks, mining and construction machines, or home generators (S18, S19, S12).
C48estimatelow confidence
Valued at 20 to 32 times operating profit, like the listed power-equipment makers, the $1.4B the price holds for the industrial products needs $44M to $70M of turbine operating profit a year, about $294M to $470M of sales at a 15% margin: 1.0 to 1.6 times the stated first year. At a 10% margin it needs 1.5 to 2.4 times.
derived$1.41B (C26) divided by 20 and by 32 (C47) gives $70M and $44M; divided by 15% (C14) gives $470M and $294M, against more than $300M in the first year (C12); at 10%, $705M and $441M.
against this
- A product not yet certified or launched carries risk its established rivals do not, and a peer multiple applied to it gives that risk away (C12, C13).
- The premium also covers battery storage and inverters, which have no disclosed figures, so the turbine alone may need less than this or the others may be worth nothing (C38).
- The first sales are in 2027, so a year of waiting sits between today's price and the first profit (C12).
Priced against its rivals
The competitors its own annual report names, each confirmed against the rival's filing. Measured on company value for each $1 of operating profit, cheapest first:
| Ticker | Company | company value for each $1 of operating profit |
|---|---|---|
| MGA | Magna International | 8.3× |
| GTX | Garrett Motion | 15.2× |
| BWA | BorgWarner | 19.5× |
The middle of the other 2 is 11.8. BorgWarner Inc. is dearest of 3.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
The trailing profit the table ranks includes last year's write-down. On this year's expected profit it sits between Magna and Garrett, so its higher price is not clearly its own.
Private or foreign rivals that cannot be priced: Robert Bosch GmbH, Denso Corporation, Hitachi, Ltd., Valeo, Schaeffler Group, Contemporary Amperex Technology Co., Limited.
The bet: what it pays if it works
This is a bet on one new business inside BorgWarner: a turbine generator for data centres, with no sales yet and production from 2027. The car-parts business is counted separately, at the price per dollar of profit it carried before the turbine was announced, and it covers most of today's price. Even if turbine sales grow past management's first-year figure, the company is worth about what it costs, so the bet is expensive.
If the turbine never sells, shareholders keep the car-parts business, worth about a tenth less than today.
| Turbine generator system (industrial products, not a reportable segment) operating profit in two to three years | Stated first years of turbine sales needed | At the stated multiple |
|---|---|---|
| $45.00M | about 1 at 15% kept | 1.0× |
| $70.00M (the big win) | about 2 at 15% kept | 1.0× |
| $135.00M (market forecast) | about 3 at 15% kept | 1.1× |
| $136.00M | about 3 at 15% kept | 1.1× |
Forecasts put US on-site gas for data centres near 20 GW a year by 2029; 1 GW, half BorgWarner's installed capacity and one rival-sized order, at $900 per kW earns about $135M. On that forecast, $135.00M pays 1.1× from today's value: an Expensive bet on the market case. Turbine generator system (industrial products, not a reportable segment) would be worth about $2.70B, 2.0× what the price pays for it.
To pay 2× (a Fair bet) it would need about $764.45M of Turbine generator system (industrial products, not a reportable segment) operating profit (about 17 stated first years of turbine sales at 15% kept); to pay 5× (a Cheap bet), about $2.86B of Turbine generator system (industrial products, not a reportable segment) operating profit (about 63 stated first years of turbine sales at 15% kept), at the same multiple.
Each row is Turbine generator system (industrial products, not a reportable segment) alone, plus the rest of the company (Turbos & Thermal, Drivetrain & Morse and PowerDrive: the car-parts core) counted at about $12.60B.
The steps it has to take
- Done Master supply agreement with TurboCell, Endeavour's turbine subsidiary
- In progress Decision on turbine capacity beyond the initial 2 GW due 2026-12
- Not started A turbine order with a stated volume and term, or a named second customer due 2027-03
- Not started Production starts in Hendersonville, North Carolina due 2027-12
- Not started First-year turbine sales above $300M at about a 15% margin due 2028-12
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Cheap bet at about
≈ $5.77
90% below the price (close, )
The option
1.0×
what Turbine generator system (industrial products, not a reportable segment) is worth if it works, against what the price pays for it
Market case
1.1×
an expensive bet if the market forecast holds
The evidence under this - 4 claims
C12management claimmedium confidence
Management expects turbine generator production to begin in Hendersonville, North Carolina, in 2027 with an initial 2 GW of installed capacity, and first-year sales of more than $300M.
source8-K Item 7.01, turbine generator reiterationprimaryQ4 2025 earnings call transcript (FMP)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- Management declined to link the $300M to the 2 GW or to size revenue at capacity (S03).
- The figure was reiterated in an 8-K furnished 'in response to questions', not in a filed report (S07).
- The product has not been through UL certification yet; component certification was due to start in September 2026 (S06).
C16management claimlow confidence
Management says customer interest in the turbine includes 'multiple hyperscalers', that demand is not a constraint, and that it will decide on more capacity in the second half of 2026.
against this
- No hyperscaler, order, volume or term has been disclosed (S06, S07).
- Management has not said what revenue 2 GW of capacity supports (S03).
C26estimatemedium confidence
At $61.32 the whole company, shares plus net debt and minority stakes, costs about $14.1B, or about 10.3 times its guided 2026 operating profit of about $1.37B. On 10 February, the day before the turbine award was announced, the same measure was about 9.2 times. The gap is about $1.4B, or about $7 a share, which is what today's price holds for the turbine and other industrial products.
derivedMarket value 203,666,354 shares (S04 cover) at $61.32 is $12.49B; plus $3.868B debt, less $2.448B cash, plus $177M minority interest at 30 June 2026 (S05) gives $14.09B. Guided GAAP operating margin midpoint 9.7% on $14.15B midpoint sales (C08) is $1.373B. On 10 February: $53.98 on 207,048,768 shares (S01 cover) plus 2025 year-end net debt and minority interest of $1.758B (S02) gives $12.93B, over the then-guided 9.9% on $14.15B, $1.401B: 9.23 times. At 9.23 times, $1.373B supports $12.67B, which is $11.08B of equity, $1.41B less than today.
against this
- 11 February also carried the full-year results, 2026 guidance and record car-part awards, so not all of that day's move was the turbine (S02).
- Against the end-2025 multiple of about 7.9 times, before a 20% rally in early 2026, the premium would be nearer $3.2B; the baseline is a choice (S15).
- The August bond tender used cash to retire debt, which leaves this enterprise value roughly unchanged but is not yet in a filed balance sheet (S08).
C33facthigh confidence
The shares closed at $53.98 on 10 February 2026 and $66.10 on 11 February, a 22.5% rise on the day the turbine award was announced, fell back to $53.25 by 9 March, reached a 252-day high of $78.82 on 3 June and closed at $61.32 on 25 September.
Where we disagree with the market
The market believes
BorgWarner is becoming a data-centre power company, not an ageing engine-parts supplier.
We believe
The car parts are worth about what buyers paid before the turbine; the $1.4B pays for about one turbine year, and growth beyond it is unproven.
The enthusiasm is easy to see: nine of ten analysts on the last call asked about data centres, and buy ratings rose from 50.0% to 68.8% since January. But the turbine appears in no annual or quarterly report, and every figure is management's.
We would be wrong if more turbine capacity or a large cloud order with a stated volume arrives, or if car-part margins rise while sales fall.
What analysts say, and the evidence
Analysts positive
69%
of 16, 1 Sep
Four months earlier
56%
of 16, 1 May
The evidence under this - 7 claims
C34facthigh confidence
On the Q2 2026 call nine of the ten analysts asked at least one question about the turbine, battery storage or inverters for data centres.
C35facthigh confidence
The share of analysts rating BorgWarner a buy rose from 50.0% in January 2026 to 68.8% in September on a panel of 16 both times, and the average price target set in the last month is 25.8% above the average over the last year.
C13facthigh confidence
Neither the FY2025 10-K nor the Q2 2026 10-Q mentions the turbine generator, TurboCell or data centres. Every figure about it comes from results releases, calls and one furnished 8-K.
C33facthigh confidence
The shares closed at $53.98 on 10 February 2026 and $66.10 on 11 February, a 22.5% rise on the day the turbine award was announced, fell back to $53.25 by 9 March, reached a 252-day high of $78.82 on 3 June and closed at $61.32 on 25 September.
C16management claimlow confidence
Management says customer interest in the turbine includes 'multiple hyperscalers', that demand is not a constraint, and that it will decide on more capacity in the second half of 2026.
against this
- No hyperscaler, order, volume or term has been disclosed (S06, S07).
- Management has not said what revenue 2 GW of capacity supports (S03).
C12management claimmedium confidence
Management expects turbine generator production to begin in Hendersonville, North Carolina, in 2027 with an initial 2 GW of installed capacity, and first-year sales of more than $300M.
source8-K Item 7.01, turbine generator reiterationprimaryQ4 2025 earnings call transcript (FMP)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- Management declined to link the $300M to the 2 GW or to size revenue at capacity (S03).
- The figure was reiterated in an 8-K furnished 'in response to questions', not in a filed report (S07).
- The product has not been through UL certification yet; component certification was due to start in September 2026 (S06).
C48estimatelow confidence
Valued at 20 to 32 times operating profit, like the listed power-equipment makers, the $1.4B the price holds for the industrial products needs $44M to $70M of turbine operating profit a year, about $294M to $470M of sales at a 15% margin: 1.0 to 1.6 times the stated first year. At a 10% margin it needs 1.5 to 2.4 times.
derived$1.41B (C26) divided by 20 and by 32 (C47) gives $70M and $44M; divided by 15% (C14) gives $470M and $294M, against more than $300M in the first year (C12); at 10%, $705M and $441M.
against this
- A product not yet certified or launched carries risk its established rivals do not, and a peer multiple applied to it gives that risk away (C12, C13).
- The premium also covers battery storage and inverters, which have no disclosed figures, so the turbine alone may need less than this or the others may be worth nothing (C38).
- The first sales are in 2027, so a year of waiting sits between today's price and the first profit (C12).
What could go wrong, and how we would know
The risks
- Engines are going away. Its profit comes from parts that exist only where there is an engine, while its electric parts have lost money and cost $1.27B of write-downs.
- A late entrant in power. It reaches data centres through one private partner, against Bloom and Caterpillar, which already ship at the scale it is building.
- Shrinking sales. Sales without currency moves are guided to fall 1.5% to 3.5% this year; cost cuts and buybacks, not sales, are growing earnings.
- Insiders are selling. Insiders made 30 open-market sales in a year, none under a pre-arranged plan, including the chief executive in May.
The evidence under this - 9 claims
C43inferencemedium confidence
BorgWarner's profit comes from parts that exist only where there is an engine, while the electric parts meant to replace them have lost money and cost $1.27B of write-downs in two years.
derivedC04 gives the profit split, C05 the sales split, C06 the write-downs.
against this
- Hybrids carry both turbos and electric parts, and hybrid output is forecast to grow (C19).
- PowerDrive earned $28M of adjusted profit in Q4 2025, and the battery segment's first-half loss narrowed to $4M (S02, S05).
- The inverter extension awards in Q2 2026 show electric parts still winning business (S05).
C06facthigh confidence
BorgWarner booked $646M of impairment charges in 2024 and $624M in 2025, in PowerDrive Systems and Battery & Charging Systems, and exited its charging business in 2025.
C44inferencemedium confidence
In data-centre power BorgWarner is a new entrant reaching buyers through one private partner, against rivals that already ship at the scale it is building.
derivedC15 gives the single channel, C23 and C24 the shipping rivals, C12 the 2 GW plan and the 2027 start.
against this
- Management says the turbine is lower-emission, faster to respond and fuel-flexible, and that time to power matters more than cost (S03, S06).
- Bloom and Caterpillar both describe demand outrunning supply, which leaves room for a new entrant (S12, S13).
C15management claimmedium confidence
The turbine generator reaches buyers only through Endeavour: the company says TurboCell is available exclusively through Endeavour's Edged Infrastructure division, and the chief executive said 'We go to market through Endeavour.'
sourceBorgWarner Industrial Solutions: Power Generation web pageprimaryQ2 2026 earnings call transcript (FMP)primary
against this
The chief executive said the capacity decision may serve 'a different market, which we're also active with our partner, Endeavour' (S06), so the channel may widen, but still through the same partner.
C23facthigh confidence
Bloom Energy, which already ships fuel-cell power to data centres, plans to double its factory capacity from 1 GW to 2 GW by the end of 2026, and a utility has agreed to procure up to 1 GW of its fuel cells.
C24facthigh confidence
Caterpillar expects its power generation sales of engines and turbines to grow in 2026 on data-centre demand, and says prime-power orders are trending higher as data-centre customers look for other power sources.
C08management claimmedium confidence
Management guides 2026 net sales of $14.0B to $14.3B, organic sales down 3.5% to 1.5%, a GAAP operating margin of 9.6% to 9.8%, an adjusted operating margin of 10.7% to 10.9%, adjusted earnings per share of $5.05 to $5.30 and free cash flow of $900M to $1.1B.
against this
- The earnings-per-share raise in August came entirely from share repurchases; sales, margin and cash guidance were only held (S05).
- The GAAP margin guide was lowered from 9.8%-10.0% in February to 9.6%-9.8% in August (S02, S05).
- The CFO said the midpoint implies a second-half adjusted margin near 10.6%, below the first half, on sales about $7.0B (S06).
- The guided battery decline widened from about $210M to about $250M between February and August (S02, S05).
C28facthigh confidence
Diluted shares fell from 224.8 million in 2024 to 216.4 million in 2025 and 206.3 million in Q2 2026. BorgWarner bought back about $650M of stock in the four quarters to June 2026 and raised its authorisation by $1B, to $1.35B through 2029.
C36facthigh confidence
In the year to September 2026 insiders made 30 open-market sales and none was under a pre-arranged trading plan, including 29,000 shares by the chief executive at $67.31 in May and 66,000 by the chief administrative officer in August. The only purchase was 7,407 shares by a newly appointed director.
What we still do not know
- How much the 2 GW turbine plant can sell in a full year, and at what price.
- What margin the turbine really earns. The only figure is an analyst's paraphrase of the finance chief.
The evidence under this - 2 claims
C12management claimmedium confidence
Management expects turbine generator production to begin in Hendersonville, North Carolina, in 2027 with an initial 2 GW of installed capacity, and first-year sales of more than $300M.
source8-K Item 7.01, turbine generator reiterationprimaryQ4 2025 earnings call transcript (FMP)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- Management declined to link the $300M to the 2 GW or to size revenue at capacity (S03).
- The figure was reiterated in an 8-K furnished 'in response to questions', not in a filed report (S07).
- The product has not been through UL certification yet; component certification was due to start in September 2026 (S06).
C14management claimlow confidence
On the Q4 2025 call an analyst restated the finance chief as describing the turbine business as earning a mid-teens incremental margin, meaning about 15 cents of operating profit on each added dollar of sales; management did not correct it.
against this
- The figure reaches the record only through an analyst's paraphrase, not a management sentence (S03).
- A first year of production usually carries launch costs that a steady-state margin does not (S06).
What would change our view
- Neutral→AttractiveThe core at its pre-turbine price
It needs all of:
- ○The whole company, debt included, falls back to about 9.2 times this year's expected operating profit, where it stood before the turbine.about ≈$53.93 today, 10% below the last close
- ○This year's adjusted operating profit lands at 10.7 cents or more per dollar of sales, the bottom of guidance.checked at the next results, due by 29 Oct
- Neutral→AttractiveTurbine demand committed beyond year one
It needs all of:
- ○BorgWarner discloses more turbine capacity, or a turbine order with a stated volume and length.watched as it happens
- ○Turbine production starts in 2027, as scheduled.watched as it happens
- Neutral→UnattractiveThe launch slips or the core margin breaks
It needs any of:
- ○The 2027 turbine start or the $300M first-year sales figure is pushed back or withdrawn.watched as it happens
- ○Management cuts this year's adjusted operating profit guidance below 10.5 cents per dollar of sales.checked at the next results, due by 29 Oct
We would also be wrong if
- The electric-drive business still loses money in 2027.
- Turbine sales in the first year come in below $300M.
What is coming
- 29 October 2026 Q3 2026 results: Whether the 10.7% to 10.9% adjusted margin guide holds on falling organic sales, and whether the turbine start keeps its 2027 date and $300M figure.
Every dated event ahead
- 29 October 2026 Q3 2026 results: Whether the 10.7% to 10.9% adjusted margin guide holds on falling organic sales, and whether the turbine start keeps its 2027 date and $300M figure.
- December 2026 Turbine capacity decision: Whether demand beyond Endeavour is real enough to add capacity, ideally with a volume or a second named customer; silence would leave potential where it is.
- February 2027 Q4 2026 results and 2027 guidance: Whether two years of awards turn into growth above vehicle production, as the chief executive promised, and what the turbine adds to the 2027 plan.
- July 2027 2.65% notes due: Whether the remaining 2027 notes are repaid from cash or refinanced, after part was tendered in August 2026.
- December 2027 Turbine production starts in Hendersonville: Whether 2 GW of capacity is installed and shipping on time; first shipments would move the turbine from a management figure to a filed one.
Since we wrote this
Written
26 Sep
Price the thesis read
$61.32
25 Sep
Latest close
$60.11
close, · -2.0% since
- 29 OctEarningsBorgWarner kept its margin guide and raised earnings per share; turbine news was absent. View heldQ3 2026 results.
- 5 OctThesis reviewPilot: the bet now names what it ridesThe owner asked that each bet name the macro trend behind it, after BWXT's bet was missing its chief executive's case for nuclear over gas.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 26 SepThesis writtenNeutral, medium convictionA fairly priced, cash-rich car-parts business, with about $1.4B in the price for a data-centre turbine that rests only on management's figures.
- 26 SepThesis reviewNeutral, medium conviction, heldValued like other generator makers rather than like car parts, the $1.4B in the price pays for about one full year of turbine sales, not three. Priced at the plan, not beyond it.
Also checked 4 times with nothing new to act on.
Sources 28
Where this came from
Sources - 28
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-02-11Item 1 business and segment descriptions, the turbocharger share of sales, customer concentration, the named competitors, the insourcing risk factor, eProduct and Foundational revenue, R&D, share count on the coverbacksC01C02C03C05C06C13C21C22C56C60
- S02primarycompany filing2026-02-11segment adjusted operating income, the $624M impairment, the non-GAAP reconciliation, the TurboCell award, original 2026 guidance, full-year cash flow and balance sheetbacksC02C04C06C07C11C28C31C45
- S03primarytranscript2026-02-11Q4 2025 earnings call transcript (FMP)data/cache/transcripts/BWA-2025Q4.jsonmanagement's account of the turbine generator: 65% of content controlled, the capacity-to-revenue question left unanswered; analysts' questions are a separate origin from the answers
So first of all, the $300 million does not relate directly to the two gigawatts.
backsC12C14C31C53 - S04primarycompany filing2026-08-05debt schedule and revolver, liquidity, the tariff-refund treatment, the buyback authorisation, 203,666,354 shares at 31 July 2026, no mention of the turbine generatorbacksC13C28C29C37C55
- S05primarycompany filing2026-08-05Q2 2026 segment sales and adjusted operating income, updated 2026 guidance, the $1B buyback increase, first-half cash flow and balance sheetbacksC07C08C09C28C29C40C45
- S06primarytranscript2026-08-05Q2 2026 earnings call transcript (FMP)data/cache/transcripts/BWA-2026Q2.jsonmanagement's answers on the turbine, battery storage and inverters; ten analysts' questions, nine of them touching the data-centre products
what we've clearly stated is Craig and I are not pleased with the current outgrowth that the company is witnessing
backsC10C12C15C16C34C38C39 - S07primarycompany filing2026-09-04the company reiterating, 'in response to questions', production in Hendersonville in 2027, 2 GW of initial capacity and more than $300M of first-year salesbacksC11C12C13
- S08primarycompany filing2026-08-10the note series outstanding, the any-and-all offer for the 7.125% 2029 notes and the $720M waterfall cap including up to $250M of the 2027 notesbacksC30
- S09primarycompany filing2026-02-19the rival turbo maker's size of the OEM turbocharger industry, and S&P Global Mobility's forecasts of turbo adoption, hybrid output and battery-electric share that Garrett quotesbacksC17C19
- S10primarycompany filing2026-03-27Magna names BorgWarner and BYD/FinDreams among the key competitors of its Power & Vision segmentbacksC42
- S11primarygovernment data2025-01-15Lawrence Berkeley National Laboratory, 2024 United States Data Center Energy Usage Report (news release) Lawrence Berkeley National Laboratorythe size and growth of US data-centre electricity use, measured by a national laboratory for the Department of Energy
The total data center electricity usage climbed from 58 TWh in 2014 to 176 TWh in 2023 and is estimated to increase between 325 to 580 TWh by 2028.
backsC25 - S12primarycompany filing2026-02-13the incumbent engine and turbine maker describing prime-power orders from data-centre customersbacksC24C46
- S13primarycompany filing2026-02-09a shipping on-site power rival doubling factory capacity from 1 GW to 2 GW by the end of 2026, and a utility procurement of up to 1 GWbacksC23
- S14primarycompany release2026-02-10Volkswagen Group press release: 5 million electric drives produced; APP550 sets the benchmark Volkswagen AGBorgWarner's largest customer describing its own electric-drive and inverter production
1 million units produced at the Kassel plant. Next step for the technology: Pulse inverter developed in-house will be a key component in strengthening future electric drives for the Electric Urban Car Family by allowing for faster product development, cost reductions and more independent manufacturing.
backsC20 - S15secondaryvendor data2026-09-26BWA research pack (FMP, FINRA, SEC XBRL), frozenprice and return series, the price-move split, the multiple against its own history, analyst rating history, price-target drift, earnings surprises, short interest, the filed cohort's multiplesbacksC32C33C35C41C45
- S16primarycompany filing2026-09-26each open-market trade in the year to September 2026 with its Rule 10b5-1 checkbox read from the filingbacksC36
- S17primarycompany release2026-09-26that the turbine generator reaches buyers only through Endeavour
TurboCell is available exclusively through Endeavour’s Edged Infrastructure solutions division.
backsC15 - S18primarycompany filing2026-02-10Cummins sells standby and prime power generators up to 3.5 MW to data-centre customers, with data-centre demand extending six to eight quartersbacksC46
- S19primarycompany filing2026-02-18Generac's large-megawatt diesel generators sold into the supply-constrained data-centre marketbacksC46
- S20secondaryvendor data2026-09-26FMP trailing ratios for Cummins, Caterpillar, Generac, GE Vernova and Bloom Energyenterprise value and trailing operating margin, from which enterprise value to trailing operating profit is struck for eachread, but no claim rests on it
- S21primaryindustry data2026-06-25SemiAnalysis - US Grid Constraints: Towards 40GW+ of Behind-The-Meter Datacenter by 2028? SemiAnalysisan independent research firm's forecast of US data-centre additions (+21GW in 2026 to +84GW by 2030), the behind-the-meter share from 2028 and a BTM equipment market above 50GW a year by 2029; the free preview of a paid report, read through ir_fetch
Our research suggests that BTM will power well over half of new US datacenters in 2028+ , and the Total Addressable Market (TAM) for DC BTM equipment to cross 50GW/ year by 2029.
backsC49 - S22secondaryanalyst2026-05-14RBC Capital Markets insight - Natural gas powers the data center boom RBC Capital Marketsa bank's tally, from Bloomberg and company reports, of announced, ordered and under-construction behind-the-meter gas capacity for US data centres, split by technology (gas turbine nearly 70GW, engine about 18GW, unknown 13GW, mixed 3GW); read through ir_fetch
As of 2026, data center developers have announced approximately 101 gigawatts of behind-the-meter natural gas generation capacity in the United States. While some of these projects may be speculative, over 57 gigawatts have already publicly disclosed equipment orders, and approximately 7 gigawatts are already under construction.
backsC50 - S23primarytranscript2026-04-30Caterpillar Q1 2026 earnings call transcript (FMP) CATdata/cache/transcripts/CAT-2026Q1.jsonthe incumbent genset maker's sixth prime-power agreement of a gigawatt or more (up to 2.1GW for ProPower) and its large-engine capacity plan, 50GW a year plus about 15GW more; read through transcript_fetch (FMP)
This represents the sixth agreement with at least 1 gigawatt of Caterpillar equipment for prime power applications. ... From a gigawatt standpoint, we gave the 50 gigawatts. ... we estimate this will give us another 15 gigawatts capacity annually when we're done with this installation.
backsC51 - S24primarytranscript2026-08-04Cummins Q2 2026 earnings call transcript (FMP) CMIdata/cache/transcripts/CMI-2026Q2.jsona genset rival adding 20GW of capacity, the larger step in 2028, and a multiyear hyperscaler agreement for several gigawatts of backup gensets; read through transcript_fetch (FMP)
the additional investment in capacity, 20 gigawatt incremental capacity across basically all of our plants and our supply chain. And we'll see some of that coming online next year. So we'd expect some step-up and then the bigger step-up happening in '28.
backsC51 - S25primarycompany filing2026-06-25a listed small-turbine generator maker's average revenue per megawatt shipped, about $1.5 million in fiscal 2026 and $1.4 million in fiscal 2025, on $56.9 million of microturbine product revenue; read through filing_fetchbacksC52
- S26primarytranscript2026-05-06Q1 2026 earnings call transcript (FMP)data/cache/transcripts/BWA-2026Q1.jsonthe chief executive agreeing that 2GW of turbine capacity is 'multiples' of the $300M first year, without giving a price; read through transcript_fetch (FMP)
but just ballpark like 2 gigawatts is multiples of $300 million of revenue. Is that fair to say? ... Yes. We haven't provided pricing. So yes, multiples is a fair way to think about it.
backsC53 - S27primarycompany filing2026-03-19beneficial ownership as of March 3, 2026 and the 5% holders, the executive biographies, the 2025 Management Incentive Plan metrics and payout, the 2025-2027 long-term incentive designbacksC57C58C59
- S28primarycompany filing2024-02-082021 to 2023 income statements recast for the PHINIA spin-off, and gross and net R&D for those yearsbacksC56