The Chicago-based automotive systems supplier reported its third quarter earnings results yesterday before the market open. BorgWarner's earnings beat expectations, while its revenue was lower than expectations.
BorgWarner reported earnings of 73 cents per share, higher than analyst expectations of 70 cents per share, Reuters reported. Revenue was $1.8 billion, lower than analyst expectations of $1.94 billion.
Borgwarner's near term growth is likely to slow to the mid-single digit range due to headwinds in China, RBC said.
"If BWA proves successful in resetting expectations and then we see signs that their growth isn't as bad as feared, we would get more constructive," RBC added. "That timing may only be a few quarters away. But, with forecasts shifting and the shareholder base likely to churn as the story transitions from growth to GARP, we wait on the sidelines."
The firm lowered its price target on the stock to $45 from $50.
Shares of BorgWarner were up 1.97% to $42.39 in early afternoon trading on Friday.
Separately, TheStreet Ratings team rates BORGWARNER INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate BORGWARNER INC (BWA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: BWA