BorgWarner (BWA) Down 21.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for BorgWarner (BWA). Shares have lost about 21.1% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is BorgWarner due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for BorgWarner Inc. before we dive into how investors and analysts have reacted as of late.BorgWarner’s Q4 Earnings Beat ExpectationsBorgWarner reported adjusted earnings of $1.35 per share for the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.16 and increased from $1.01 recorded in the prior-year quarter. Better-than-expected adjusted operating income from the Drivetrain & Morse Systems segment drove the outperformance. The automotive equipment supplier reported net sales of $3.57 billion, up 3.9% year over year. The figure also topped the Zacks Consensus Estimate of $3.51 billion.Segmental PerformanceTurbos & Thermal Technologies: Net sales totaled $1.4 billion in the reported quarter, down from $1.41 billion in the year-ago period. The figure , however, beat our estimate of $1.39 billion. Adjusted operating income of $198 million decreased from $223 million recorded in the year-ago quarter and missed our estimate of $217 million.Drivetrain & Morse Systems: Net sales totaled $1.41 billion in the reported quarter, up from $1.35 billion in the year-ago period. The metric also outpaced our estimate of $1.37 billion. Adjusted operating income of $271 million increased from $240 million recorded in the year-ago period and surpassed our estimate of $261million.PowerDrive Systems: Sales from the segment were $623 million, up from $525 million in the year-ago period and topped our estimate of $590 million. The segment reported an adjusted operating income of $28 million againstcompared with the loss of $14 million in the corresponding period of 2024.Battery & Charging Systems: Sales from the segment were $149 million, which decreased from $162 million a year ago but topped our estimate of $132 million. The segment reported an adjusted operating income of $2 million against compared with the loss of $14 million in the corresponding period of 2024.Balance Sheet, Cash Flow, Dividend & BuybackAs of Dec. 31, 2025, BorgWarner had $2.31 billion in cash/cash equivalents/restricted cash compared with $2.09 billion as of Dec. 31, 2024. As of the end of fourth-quarter 2025, long-term debt was $3.89 billion, up from $3.76 billion recorded as of Dec. 31, 2024.Net cash provided by the operating activities from continuing operations was $619 million in the quarter. Capital expenditures totaled $162 million. FCF totaled $470 million.2026 GuidanceFor full-year 2026, the company anticipates net sales in the band of $14.1-$14.3 billion compared with 14.32 billion in 2025. Adjusted operating margin is expected in the band of 10.7-10.9% compared with 10.7% in 2025.Adjusted earnings per share are estimated in the range of $5-$5.20 compared with $4.91 in 2025. Operating cash flow is forecasted in the range of $1.6- $1.7 billion compared with $1.65 billion in 2025. Free cash flow is projected in the band of $900 million to $1.1 billion compared with $1.21 billion reported in 2025.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresCurrently, BorgWarner has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BorgWarner has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful.From inception in 2012 through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2026. You can still be among the first to see these just-released stocks with enormous potential.See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BorgWarner Inc. (BWA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks