Zacks Investment Research downgraded shares of BorgWarner Inc. (BWA) from NEUTRAL to UNDERPERFORM on January 22, 2013, with a target price of $69.00.
BorgWarner saw a 3.5% increase in 2013-third quarter profits to $1.19 per share, which was in line with the Zacks Consensus Estimate. However, revenues dipped 5% to $1.7 billion due to a 6% fall in light vehicle production in Europe, which comprises over half of the company's sales. Further, the company revised its 2012 revenues and earnings guidance downward owing to the economic slowdown in Europe. These apart, pricing pressures from OEMs and strong competition are likely to adversely affect the company's results. Therefore, we have downgraded the recommendation on the shares of the company to Underperform from Neutral and set a target price of $69.00.
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