BWA BorgWarner Inc

$BWA Morgan Stanley upgraded BorgWarner to Overweight from Equal Weight with a 95 target. The call rests on two legs: what MS calls a "durable" automotive earnings base, and an emerging distributed power business. The distributed power leg has hardware now. BorgWarner signed a master supply agreement with TurboCell (an Endeavour subsidiary) for modular turbine generator systems for AI data centers and microgrids. Production starts early 2027, with the company guiding to more than 300 million in first-year sales. Management says the program converts at mid-teens margins and is EPS accretive from day one. MS calls the turbine generator the "clearest near-term path to commercialization." Tracking whether the distributed power business scales beyond the TurboCell award.

JPMorgan analyst Rajat Gupta highlighted opportunities in U.S. auto suppliers, focusing on companies with hybrid and internal-combustion resilience, diversified revenue and balance-sheet flexibility. BorgWarner is JPMorgan’s top pick, with an Overweight rating and an $85 price target. The bank cited the company’s exposure to hybrids and ICE vehicles, defensible content and growing opportunities outside autos. Around 75% of BorgWarner’s China revenue comes from domestic Chinese automakers, while its industrial and data-center businesses offer additional upside. BorgWarner plans to begin turbogenerator production in early 2027, with first-year revenue expected to exceed $300 million and potential annualized revenue of more than $2 billion over time from its 2-gigawatt installed capacity. This excludes potential additional capacity and adjacent products such as battery energy-storage systems and inverters. $BWA