BorgWarner Inc. 2Q Ahead on Margins; FY Guide Unchanged on Higher R&D Spend; Buyback Authorization Increased; See Mixed Day for Stock Pending Updates on Timing of New DC/Industrial Opportunities

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

BorgWarner Inc.

2Q Ahead on Margins; FY Guide Unchanged on Higher

R&D Spend; Buyback Authorization Increased; See

Mixed Day for Stock Pending Updates on Timing of

New DC/Industrial Opportunities

Overweight

BWA, BWA US

Price (04 Aug 26):$63.04

Autos & Auto Parts

Quick take: 2Q ahead, driven by margins, with full year revenue (down 2.5%

organic) and EBIT margin guide (10.8%) maintained and EPS higher to reflect

YTD buybacks. Implied 2H guide is slightly below consensus, with BWA noting

an increase in R&D spend to accelerate growth opportunities in data center and

industrial markets. DC/Industrial opportunities continue to progress with no

change to SoP timelines and certification and UL compliance on track. Buyback

authorization increased by $1 bn to $1.35 bn. Expect a mixed day for the stock

pending further details on runway and revenue opportunity beyond 2027 tied to

DC/Industrial exposure.

Rajat Gupta AC

(1-212) 622-6382

Yash Beswala

(1-212) 622-0028

Jash Patwa

(1-212) 622-5472

J.P. Morgan Securities LLC

See Table 1 and Table 2 for results vs. JPME/consensus and implied 2H

guidance.

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Award momentum: Seven awards in 2Q, spread across Foundational and

eProducts. In eProducts, BWA secured (1) two high-volume inverter extension

awards with a major European OEM (plug-in hybrid and 800V battery electric

applications, 2029 production) and (2) a next-generation iDM award with a global

OEM starting in 2027. Foundational wins included (3) an eTurbo program with a

major European OEM for a hybrid car application in 2029, (4) a variable cam

timing conquest with a Chinese OEM alongside a program life extension with a

European premium OEM, and (5) a torque-on-demand transfer case with

mechanical lock for a newly developed full-size SUV at a Chinese OEM starting

in 4Q26.

Other Key Takeaways: NA outgrew on transfer case volumes, Europe was below

market on Foundational thermal and battery, while China was in line. BWA cut its

China production assumptions sharply while raising NA and Europe, leaving the

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