BorgWarner Inc. (NYSE:BWA) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$3.6b arriving 2.3% ahead of forecasts. Statutory earnings per share (EPS) were US$0.90, 5.3% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

After the latest results, the 18 analysts covering BorgWarner are now predicting revenues of US$14.8b in 2024. If met, this would reflect a reasonable 2.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 28% to US$3.80. In the lead-up to this report, the analysts had been modelling revenues of US$14.8b and earnings per share (EPS) of US$3.75 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$41.61, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on BorgWarner, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$33.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that BorgWarner's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BorgWarner.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$41.61, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple BorgWarner analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that BorgWarner is showing 2 warning signs in our investment analysis , you should know about...

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