Morgan Stanley upgrades BorgWarner stock rating on power business growth
Morgan Stanley upgraded BorgWarner's stock rating to Overweight and increased its price target from $71 to $95 on Monday. The investment firm praised the company's automotive earnings base and emerging distributed-power business as key drivers for the upgrade. Morgan Stanley's valuation suggests a potential upside of nearly 58% to the new target price, with the stock currently trading at $60.26.
The firm identified the turbine generator as the most promising near-term growth opportunity, citing its ability to provide a clear path to commercialization. Morgan Stanley expects the AI power shortfall to reach 77 GW by 2029, further supporting their positive outlook. The rating upgrade comes as BorgWarner demonstrates compelling value metrics, including a low P/E ratio and attractive PEG ratio.
The company's microgrid inverter and energy storage system products offer additional growth potential outside of the automotive sector. Recent second-quarter results exceeded analyst expectations, contributing to a 6% increase in BorgWarner's stock value.
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