I am assigning BorgWarner (NYSE:BWA) a positive risk/reward rating based on a cyclical upturn in global auto production, the secular growth trend toward electrification of transportation, and a positively skewed potential return spectrum resulting from its discounted valuation and robust growth profile.
Risk/Reward Rating: Positive
On November 3, 2021, BorgWarner reported 79% sales growth through the first nine months of 2021 and 35% sales growth for Q3 2021 compared to Q3 2020. The exceptional growth year-to-date was driven by the acquisition of Delphi Technologies (which closed late in 2020) and a rebound in the global automotive industry from the COVID shutdowns.
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