BWA

BorgWarner is a global auto-parts supplier straddling the powertrain transition: eProducts grew to about 18% of revenue (~$2.6B, up from 14% in FY2023) while Foundational combustion products are still 82% (~$11.7B). That balance is, as management notes, deliberate given EV-adoption volatility across regions — but it also means revenue is going nowhere fast, up just 1.6% to $14.3B in FY2025 and essentially flat for three years.

Profitability is the concern. Net income fell 18.0% to $277M and diluted EPS dropped 14.7% to $1.28, the third straight year of declining earnings from the $944M FY2022 peak. Margins are thin (3.7% operating, 1.9% net, 5.1% ROE), pressured by restructuring as the company exits its charging business and consolidates North American battery systems — actions expected to remove ~$30M and ~$20M of losses/costs by 2026 — plus a $40M net charge from the PHINIA settlement. The headline 56.1x P/E is on these depressed earnings and overstates how expensive the stock is.