Thursday, KeyBanc Capital downgraded BorgWarner Inc. (BWA) shares to Hold from Buy. The brokerage lowered its 2009 third quarter EPS estimate to $0.10 from $0.18, its 2009 estimate to $0.07 from $0.27, and its 2010 estimate to $1.35 from $1.58.
Analyst Brett Hoselton said that he is incrementally concerned that BWA could report 2009 third quarter earnings below consensus expectations or that the Street may cut estimates prior to its earnings release, both of which could be a negative catalyst for the stock.
The analyst believes investors may be particularly sensitive to lowered expectations given disappointing second quarter of 2009 results and the overall positive sentiment for the rest of the group. The analyst believes that the negative factors affecting second quarter of 2009 and third quarter of 2009 earnings could persist for several more quarters before dissipating and becoming tailwinds in 2010.
The analyst believes that potential weakness in stock price could present long-term investors with a more attractive entry point as he remains confident in solid longer-term fundamentals driven by an improving production environment, a strong new business backlog, and a robust product portfolio.
Currently, BWA is down $1.71 or 5.20% and trading at $31.16.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.