Analyst Upgrades BorgWarner To 'Outperform'

NEW YORK (AP) — Shares of BorgWarner Inc. have lagged the broader market but should rebound as investor sentiment improves and the auto parts maker gains share in the European diesel market, an analyst said Monday.

Wells Fargo Securities analyst Richard Kwas upgraded shares of BorgWarner to "Outperform" from "Market Perform" in a note to investors. The stock rose 47 cents to $29.70 in midday trading.

Kwas said shares of BorgWarner have "significantly underperformed the market" since late July, "creating a nice entry point." The stock has fallen 18 percent since their close July 24 at $35.85.

In the short term, the company won't benefit as much as other suppliers from production increases due to the Cash for Clunkers program, Kwas said. However, the company's presence in the Western European diesel market should improve as similar scrappage programs in countries there wind down.

Parts suppliers have been battered in the automotive downturn as carmakers slash production. But recent production increases and a rising outlook for auto sales has led some analysts to take a better view of the industry in recent months.

Shares of BorgWarner are up 34 percent since the start of the year.